MASTER 
NEGATIVE 

NO.  94-821 38 


COPYRIGHT  STATEMENT 


The  copyright  law  of  the  United  States  (Title  17,  United  States  Code) 
governs  the  mal<ing  of  photocopies  or  other  reproductions  of  copyrighted 
materials  including  foreign  works  under  certain  conditions.  In  addition, 
the  United  States  extends  protection  to  foreign  works  by  means  of 
various  international  conventions,  bilateral  agreements,  and 
proclamations. 

Under  certain  conditions  specified  in  the  law,  libraries  and  archives  are 
authorized  to  furnish  a  photocopy  or  other  reproduction.  One  of  these 
specified  conditions  is  that  the  photocopy  or  reproduction  is  not  to  be 
"used  for  any  purpose  other  than  private  study,  scholarship,  or  research." 
If  a  user  makes  a  request  for,  or  ater  uses,  a  photocopy  or  reproduction 
for  purposes  in  excess  of  "fair  use,"  that  user  may  be  liable  for  copyright 
infringement. 

The  Columbia  University  Libraries  reserve  the  right  to  refuse  to  accept  a 
copying  order  if,  in  its  judgement,  fulfillment  of  the  order  would  involve 
violation  of  the  copyright  law. 


Author: 

U.S.  Interstate  commerce 
commission 

Title: 

Interpretations  of 
accounting... 

Place: 

Washington, 

Date: 

1916 


^^  »  ■^■■P  m 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

BIBLIOGRAPHIC  MICROFORM  TARGET 


MASTER   NEGATIVE  * 


ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


■u^iNesa 

'4'30«69 
'Un32 


1 


U«S«  Intorstate  cozanerce  oomznlsslon* 

«« •Interpretations  of  accounting  classifications 
emobidied  in  the  uniform  systems  of  accounts  for 
telephone  companies  (Classes  A,  B»  and  0)  pre- 
scribed by  the  Interstate  commerce  commission  in 
accordance  with  section  20  of  the  Act  to  regulate 
commerce.  Effective  on  July  1,  1916.  Washington, 
Govt«print«off .,  1916. 

60  p«  22^m. 


At  head  of  title i /^Accounting  bulletin  no«ll« 
Volume  of  pamphle  v^^  s. 


RESTRICTIONS  ON  USE: 


TECHNICAL  MICROFORM  DATA 


FILM  SIZE:  SSvy^r^ 


REDUCTION  RATIO:  jl^ 


IMAGE  PLACEMENT:   lA  (ua)  IB      IIB 


DATE  FILMED:  G-2Z-9^/ 


INITIALS:    LLfe 


TRACKING  #  : 


(t)SH  0\U3I 


FILMED  BY  PRESERVATION  RESOURCES,  BETHLEHEM,  PA. 


BIBLIOGRAPHIC  IRREGULARITIES 

MAIN  ENTRY:    U.S.  Interstate  commerce  commission 

Interpretations  of  accounting  classifications 


Bibliographic  Irregularities  in  the  Original  Document: 

List  all  volumes  and  pages  affected;  include  name  of  institution  if  filming  borrowed  text. 


Page(s)  missing/not  available: 


.Volume(s)  missing/not  available:_ 
Illegible  and/or  damaged  page(s):. 


.Page(s)  or  volume(s)  misnumbered: 
Bound  out  of  sequence: 


.Page(s)  or  voiume(s)  filmed  from  copy  borrowed  from 


X Other:     Irregular  pagination  throughout 


TRACKING*:       MSH01431 


CO 

^ 

CJl 

Ol 

3 

:: 

— 
.-J 

- 

> 

Q) 

DO 

ABC 
bcdef. 

o  m 

qiQ  o 

Q.~n 

^m 

CD  O 

do"! 

3  X 

*~^  ^  ^T 

t\>=-^ 

cn3  ^ 

?^ 

a>:3  Z 

5  o 

^5  O 

<  "U 

N  en 

RST 

stuv 

^^ 

^  c 

CT>X 

X  < 

OOISJ 

N   < 

O 

X 

ISI 


a; 


^: 


a 


;^ 


A^ 


,.-   ."?•■ 


^, 


a^ 


'^%^^ 

v^ 

^-i» 


Ul 

o 
i 


.^/ 


in 


a^ 


S 

3 
3 


Ol 


o^ 


00 


b 


in 


1.0  mm 


1.5  mm 


2.0  mm 


■tcd»%>ii|iam«ioporiim>«»y/l?: 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghijklmnopqrstuvwxyz  1 234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 

abcdefghijklmnopqrstuvwxyz 

12345678^0 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
^  r-  abcdefghijklmnopqrstuvwxyz 

2.5  mm  1234567890 


^^ 


f^ 


m 

H 

O 
O 

■o  m  -o 
OLl"o 

I  TJ  ^ 

r^O  CO 
m 

39 
O 

m 


e 


4^ 


'4^ 


!-• 

N> 

Ol 

O 

3 
3 

3 
3 

01 

o- 

o> 

a- 

^o 

<5.o 

f8 

3.m 

^S 

3x 

3l 

5^ 

IJKLMN 
nopqrst 

lOPQR 
uvwxy 

Kc 

M  C/> 

o»5 

r^c 

o»x 

OJ^ 

>4-< 
00 IM 

8 

O^X 

>si-C 

CJOfM 

UD 

O 

J^^. 


Accoantingr  Bulletin  Ko.  11 


INTERPRETATIONS 

OF 

ACCOUNTING  CLASSIFICATIONS 

EMBODIED  IN  THE 

UNIFORM  SYSTEMS  OF  ACCOUNTS 

FOR 

TELEPHONE  COMPANIES 

(CLASSES  A.  B,  AND  C) 

PRESCRIBED  BY  THE 


INTERSTATE  COMMERCE  COMMISSION 

IN  AOOORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


Effective  on  July  1, 1916 

SCilC.  .  Of 
B 'SINCSS 
UBHARY 


\ 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1916 


eUHOOL  OF  BUSINESS 
COLUMBIA  UNIVERSITY 


I 


■"^•.»i^. 


Columbia  ^Bniberfiittp 

intfieCitpofiBetogorfe 


LIBRARY 


School  of  Business 


( 


Accounting:  Bulletin  No.  11 


INTERPRETATIONS 

OP 

ACCOUNTING  CLASSIFICATIONS 

EMBODIED  IN  THE 

UNIFORM  SYSTEMS  OF  ACCOUNTS 

FOR 

TELEPHONE  COMPANIES 

(CLASSES  A.  B,  AND  C) 

PRESCRIBED  BY  THE 


INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


Effective  on  July  1, 1916 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1916 


^ 


THE  INTERSTATE  COMMERCE  COMMISSION. 


Balthasar  H.  Meyer. 
JuDSON  C.  Clements. 
Edgar  E.  Clark. 
James  S.  Harlan. 
Charles  C.  McChord. 
Henry  C.  Hall. 
WiNTHROP  M.  Daniels. 

George  B.  McGinty,  Secretary, 

(2) 


I  oi-C^^j 


^ 


ORDER. 

At  a  General  Session  of  the  INTERSTATE  COMMERCE 
COMMISSION,  held  at  its  office  in  Washington,  D.  C, 
on  the  26th  day  of  June,  A.  D.  1916. 

The  subject  of  a  Uniform  System  of  Accomits  to  be  prescribed  for 
and  kept  by  telephone  companies  being  under  consideration,  the 
following  order  was  entered : 

It  is  ordered^  That  the  interpretations  of  the  accounting  classifi- 
cations for  telephone  companies,  prepared  under  the  direction  of  this 
Commission  and  embodied  in  printed  form  to  be  hereafter  known 
as  Accounting  Bulletin  No.  11,  and  now  before  this  Commission,  be, 
and  the  same  are  hereby,  approved ;  that  a  copy  of  said  bulletin  duly 
authenticated  by  the  Secretary  of  the  Commission  be  filed  in  its 
archives,  and  a  second  copy  thereof,  in  like  manner  authenticated, 
in  the  office  of  the  Division  of  Carriers'  Accounts ;  and  that  each  of 
said  copies  so  authenticated  and  filed  shall  be  deemed  an  original 
record  thereof. 

It  is  further  ordered,  That  the  accounting  methods  directed  in 
the  interpretations  contained  in  the  said  Accounting  Bulletin  No.  11 
be,  and  they  are  hereby,  prescribed  for  the  use  of  telephone  com- 
panies having  annual  operating  revenues  exceeding  $10,000,  and 
subject  to  the  provisions  of  the  Act  to  Regulate  Commerce,  as 
amended,  in  the  keeping  and  recording  of  their  accounts. 

It  is  further  ordered,  That  July  1,  1916,  be,  and  it  is  hereby, 
fixed  as  the  date  on  which  the  said  Accounting  Bulletin  No.  11  shall 
become  effective,  the  same  to  remain  in  effect  until  otherwise  ordered 
by  the  Commission. 

By  the  Commission. 

[seal.]  George  B.  McGintt, 

/Secretary. 

(3) 

> 


INTRODUCTORY  LETTER. 


Interstate  Commerce  Commission, 

Division  of  Carriers'  Accounts, 
^  Washington^  June  26, 1916, 

To  Telephone  Companies  (Classes  A,  B,  and  C)  : 

Systems  of  accounts  for  telephone  companies  subject  to  the  juris- 
diction of  the  Interstate  Commerce  Commission  have  been  issued 
under  the  authority  contained  in  section  20  of  the  Act  to  regulate 
commerce.  The  Uniform  System  of  Accounts  for  Class  A  and  Class  B 
Telephone  Companies  became  effective  January  1,  1913,  and  a  sup- 
plement thereto  became  effective  on  January  1,  1915.  The  Uniform 
System  of  Accounts  for  Class  C  Telephone  Companions  became  effect- 
ive on  January  1,  1915.  This  accounting  bulletin  contains  answers 
to  accounting  questions  which  have  been  raised  since  the  issuance 
^  of  the  systems  of  accounts  and  is  published  in  order  that  uniformity 
may  be  had  in  the  application  of  the  rules  laid  down  in  the  systems 
of  accounts.  It  is  supplementary  to,  and  should  be  used  in  con- 
junction with,  the  systems  of  accounts  prescribed  for  Class  A,  Class 
B,  and  Class  C  companies. 

In  the  preparation  of  this  bulletin  the  Commission  has  had  the 
cooperation  of  a  joint  accounting  committee  representing  practically 
all  of  the  large  telephone  companies  and  a  large  number  of  the  small 
companies.  This  bulletin  was  submitted  in  tentative  form  to  the 
commissions  of  the  several  States  having  supervision  of  telephone 
companies  and  criticisms  and  suggestions  were  invited.  Those 
received  have  been  given  careful  consideration  in  the  completion  of 

g  the  bulletin  as  now  issued. 

Fred  W.  Swenet, 

Chief  Exarmner  of  Accounts. 
(6) 


r 


INTERSTATE  COMMERCE  COMMISSION  ACCOUNTING  BULLETIN  NO.  11. 


^T'JJI^^.^iTJ''''^  ""^  ACCOUNTING  CLASSIFICATIONS  EMBODIED 
IN  THL  UNIFORM  SYSTEMS  OF  ACCOUNTS  FOR  TELEPHONE  COM- 
PANIES. 

Note.— In  the  answers  to  cases  references  are  usually  made  to  the  aass  A 
and  Class  C  accounts.  Where  the  accounts  shown  are  for  Class  A  companies 
and  the  same  accounts  are  not  prescribed  for  Class  B  companies  in  the  Uniform 
System  of  Accounts.  Class  B  companies  should  interpret  the  answers  as  ap- 
P  y  ng  to  their  particular  account  of  which  the  Class  A  account  is  a  sub- 
division.  Where  no  reference  Is  given  to  specific  accounts  the  case  applies  to 
all  three  classes  of  companies  unless  it  specifically  indicates  otherwise. 

Case  1. 

Query.  Is  it  required  that  the  titles  of  the  accounts  carried  on  the  company's 
books  correspond  with  the  titles  of  accounts  in  the  Uniform  Systems  of  Accounts  v 

.on.TTK  ^.?.^  ^''*^'''*'"  ^^'^^'"^  **^  Accounts  prescribed  by  the  Commission 
conta  n  the  titles  and  texts  of  the  various  accounts  and  require  that  companies 
keep  their  accounts  in  conformity  therewith.  Balance-sheet  accounts  which  are 
clearly  summaries  of  other  accounts  are  not  required  to  be  set  up  on  the  books 
of  the  company  (see  sec.  3.  p.  13.  of  the  Uniform  System  of  Accounts  for 
Class  A  and  B  companies).  All  accounts  kept  on  the  company's  books  shall 
conform  in  titles  to  those  prescribed  by  the  Commission  except  as  follows  • 

(1 )  Subaccounts  as  provided  in  se^rtlon  1,  page  9.  of  the  Uniform  Svstems  of 
Accounts  and  such  subdivisions  of  prescribed  balance-sheet  accounts  as  are 
irermltted  (see  sec.  3.  p.  13.  of  the  Uniform  System  of  Accounts  for  Class  A 
and  B  companies).  All  such  subaccounts  or  subdivisions  shall  give  reference 
by  title,  number,  or  both,  to  the  accounts  of  which  they  are  subdivisions.  When 
such  subaccounts  or  subdivisions  are  maintained,  it  is  not  required  that  the 
main  account  of  which  they  are  subdivisions  shall  be  kept  on  the  company's 
general  books.  "^ 

In  Ihi  ^^^^["'f  ^f^  *>»•  temporary  accounts  for  which  special  provision  is  made 

.^f  ^™°ji««»o°'«  orders  on  page  6  of  the  Uniform  Systems  of  Accounts. 

(3)  Clearing  accounts  (other  than  those  provided  for  Class  A  and  B  com- 

panics)  necessary  in  making  the  proper  distribution  of  items  to  appropriate 

primary  accounts.  appiuprmie 

Case  2. 

Query  To  what  extent  should  detailed  information  be  shown  in  the  general 
books  of  telephone  companies?  general 

thf  rr*  '^^^^f^^^^^^  «»^^"  ^  kept  with  sufficient  particularity  to  show  fullv 
the  facts  pertaining  to  all  entries  made  in  the  accounts.  Where  the  full  Infor 
mation  is  not  recorded  in  the  general  books,  the  entries  therein  shall  be  su^ 
ported  by  other  records  in  which  the  full  details  shall  be  shown.  Such  gen^ 
eral  book  entries  shall  contain  sufficient  reference  to  the  detail  records  to  per- 
34286'— 16 2  (7)  ^ 


8 

mlt  ready  identification  of  the  latter,  and  the  detail  records  shall  be  kept  In 
such  manner  as  to  be  readily  accessible  when  required  for  examination  by 
representatives  of  the  Interstate  Commerce  Commission. 

Case  3. 

Query.  What  is  the  significance  of  the  term  "  balance  sheet,"  as  used  In  sec- 
tion 5,  page  13,  of  the  Uniform  System  of  Accounts  for  Class  A  and  B 
companies? 

Answer.  The  balance  sheet  referred  to  In  section  5  is  the  balance  sheet  con- 
tained in  the  reports  requireil  by  the  Interstate  Commerce  Commission. 

Case  4. 

Query.  May  account  No.  102,  "  Reserve  for  accrued  depreciation — Cr."  (Class 
C,  account  No.  185),  be  subdivided  between  the  amount  applicable  to  fixed 
capital  (or  plant  and  equipment)  installed  prior  to  the  effective  date  of  the 
system  of  accounts  and  that  Installed  since  that  date? 

Answer.  Yes;  but  the  subdivision  is  not  required.  Section  1,  page  9,  of  the 
Uniform  Systems  of  Accounts  for  Class  A,  B,  an<J  C  companies  permit  the 
subdivision  of  any  account,  provided  the  integrity  of  the  main  account  Is  not 
Impaired. 

Case  5. 

Query.  If  subaccounts  for  "reacquired  securities,"  referred  to  in  section  5, 
page  13,  of  the  Uniform  System  of  Accounts  for  Class  A  and  B  companies,  are 
carried  on  a  company's  ledger,  are  such  subaccounts  debit  or  credit  accounts 
when  appearing  (1)  under  an  asset  account  and  (2)  under  a  liability  account? 

Answer.  Such  subaccounts  are  debit  accounts,  when  under  an  asset  account; 
and  credit  accounts,  when  under  a  liability  account.  The  subaccounts  are  of  the 
same  nature  as  the  principal  accounts  of  which  they  are  a  part. 

Case  6. 

Query.  How  should  securities,  sometimes  termetl  "  treasury  securities,"  signed 
and  sealed  and  placed  with  the  proper  officer  for  sale  and  delivery,  be  accounted 
for  In  the  balance-sheet  accounts? 

Ansxoer.  The  same  treatment  shall  be  accorded  "treasury  securities"  as  is 
provided  for  "  reacquired  securities  "  in  section  5,  page  13,  of  the  Uniform  Sys- 
tem of  Accounts  for  Class  A  and  B  companies.     ( See  Case  5. ) 

Class  C  companies  may  carry  such  securities  at  par  In  account  No.  110, 
"Securities,"  and  in  account  No.  160,  "Capital  stock,"  or  No.  165,  "Funded 
debt,"  as  may  be  appropriate,  but  In  stating  the  balance  sheet  In  reports  to  the 
Interstate  Commerce  Commission  the  par  value  of  such  securities  shall  be 
shown  as  deductions  from  the  totals  of  these  accounts. 

Case  7. 

Query.  What  should  be  the  accounting  for  a  note  carried  In  account  No.  105, 
"Investment  securities"  (Class  C,  account  No.  110),  upon  which  payment  of 
principal  has  been  defaulted? 

Answer.  Transfer  to  account  No.  117,  "  Bills  receivable  "  (Class  C,  account  No. 
120),  or  to  account  No.  110,  "Advances  to  system  corporations  for  construction, 
equipment,  and  betterments"  (Class  C,  account  No.  120),  as  may  be  approprl- 


r 


ate.    If  the  asset  is  of  doubtful  value,  the  transfer  may  be  to  account  No.  136, 
Other  suspense"  (Class  C,  account  No.  150),  pending  the  final  disposition  of 
f         the  matter. 

Case  8. 

Query.  What  should  be  the  accounting  for  accruals  of  depreciation  on  Invest- 
ments In  physical  property  carried  In  Class  A  and  B  account  No.  Ill,  "  Miscel- 
laneous investments  "  (Class  C,  account  No.  105)  ? 

Answer.  Charge  the  accruals  to  account  No.  303,  "  Other  operating  expenses  " 

(Class  C,  account  No.  340),  if  on  operated  property,  or  to  account  No.  320, 

"Rent  expense"  (Class  C,  account  No.  340),  If  on  nonoperated  property,  and 

credit  account  No.  170A,  "Other  deferred  credit  items"   (Class  C,  account 

^$         No.  190). 

Case  9. 

Query.  What  should  be  the  accounting  for  commissions  paid  to  brokers  for 
the  purchase  of  the  securities  of  other  companies? 

Answer,  The  amount  of  such  commissions  shall  be  considered  as  a  part  of  the 
cost  of  the  securities  purchased. 

Case  10. 

Query.  To  what  account  should  be  charged  the  cost  of  buildings  and  land 
not  used  in  telephone  operations  and  held  for  sale? 

Answer.  Account  No.  Ill,  "Miscellaneous  investments"   (CJlass  C,  account 
No.  105). 
^  Case  11. 

Query.  To  what  account  should  be  charged  the  cost  of  buildings  built  to  rent 
on  land  which  is  held  for  future  central  office  or  other  telephone  purposes? 

Answer.  The  cost  of  such  buildings  shall  be  charged  to  account  No.  Ill, 
"Miscellaneous  Investments"  (Class  C,  account  No.  105).  The  cost  of  land 
held  for  future  telephone  purposes  shall  be  charged  to  account  No.  211,  "  Land  " 
(Class  C,  account  No.  210). 

Case  12. 

Query.  What  should  be  the  accounting  for  rents  received  from  and  expenses 
in  connection  with  property  carried  in  account  No.  Ill,  "  Miscellaneous  invest- 
ments" (Class  C,  account  No.  105),  and  leased  to  others? 
Answer.  Credit   rents   received   to   account   No.   311,    "Miscellaneous   rent 
*  revenues"   (Class  C,  account  No.  320),  and  charge  expenses  to  account  No. 

f  820,  "  Rent  expense  "  (Class  C,  account  No.  320). 

Case  13. 

Query.  What  should  be  the  accounting  for  profits  realized  or  losses  sustained 
when  securities  of  other  companies  carried  In  account  No.  105,  "  Investment 
securities,"  or  account  No.  116,  "Marketable  securities"  (Class  C,  account  Na 
110),  are  sold  for  more  or  less  than  the  value  at  which  they  are  carried  on  the 
accounting  company's  books? 

Answer.  Credit  profits  from  sale  of  securities  to  account  No.  401,  "Miscel- 
laneous additions  to  surplus"  (Class  C,  account  No.  195),  and  charge  losses  to 
account  No.  417,  "Other  deductions  from  surplus"  (Class  C,  account  No. 
195),  except  where  provision  for  loss  has  been  made  in  a  reserve  account. 


i 


10 

Case  14. 

Query.  What  is  the  general  distinction  between  Class  A  company  accounts 
No.  113,  "  Cash,"  and  No.  114,  "  Special  deposits  "? 

Answer.  Account  No.  113  should  include  all  items  of  cash  or  deposits  which 
are  subject  to  the  control  of  the  company  and  available  for  current  general 
requirements. 

Account  No.  114  should  include  all  items  of  cash  or  special  deposits  which, 
although  remaining  "working  assets"  of  the  company,  are  not  available  for 
current  requirements.     (See  Case  22.) 

"Time  deposits"  (usually  covered  by  certificates  of  deposit),  although  tech- 
nically not  available  for  current  requirements,  as  a  practical  matter  generally 
are  available  and,  if  such  is  the  case,  may  be  included  in  account  No.  113. 

Case  15. 

Query.  Is  it  required  that  Class  A  company  account  No.  114,  "  Special  de- 
posits," be  set  up  to  cover  declared  dividends? 

Answer.  No.  Dividends  may  be  paid  from  general  cash,  in  which  event  it 
is  not  required  that  account  No.  114  be  used.  This  account  should  be  used  only 
when  special  deposits  for  this  purpose  are  actually  made. 

Case  16. 

Query.  Should  the  term  "  deposits  to  pay  declared  dividends  and  matured 
interest "  in  the  definition  of  Class  A  company  account  No.  114,  "  Special  de- 
posits," be  held  to  cover  an  undivided  sum  paid  to  mortgage  trustees  in  satis- 
faction of  the  interest  on  a  bond  issue? 

Answer.  No.  If  the  payment  to  the  trustees  satisfies  the  liability  the  amount 
should  be  charged  to  the  appropriate  interest  liability  accounts,  and  account 
No.  114  Is  not  involved. 

Case  17. 

Query.  Is  it  required  that  all  materials  and  supplies  be  carried  through  the 
materials  and  supplies  account? 

Answer.  No.  Materials  and  supplies  purchased  for  a  specific  project  or 
for  immediate  use  may  be  charged  directly  to  the  accounts  affected  and  need 
not  be  carried  through  account  No.  122,  "  Materials  and  supplies  "  (Class  C, 
account  No.  135). 

Case  18. 

Query.  What  should  be  the  accounting  for  discounts  realized  through  prompt 
payment  and  Interest  payable  through  delayed  payment  of  bills  for  materials 
and  supplies? 

Answer.  Materials  and  supplies  shall  be  charged  to  the  accounts  at  their  actual 
cost  in  cash,  or  its  equivalent,  to  the  accounting  company. 

Discounts  realized  for  the  prompt  payment  of  bills  shall,  as  far  as  possible, 
be  applied  as  credits  to  the  accounts  charged  with  the  particular  bills  or  In- 
voices Involved. 

Discounts  realized  which  can  not  be  credited  to  the  accounts  charged  with 
the  particular  bills  or  invoices  involved  shall  be  credited  to  account  No.  704, 
"Supply  expense"  (Class  C,  account  No.  135). 

Interest  on  delayed  payments  shall  be  charged  to  account  No.  336,  "Other 
interest  deductions"  (Class  C.  account  No.  360). 


I 


n 

Case  19. 

J  Query.  Do  the  Uniform  Systems  of  Accounts  require  that  assets  be  specifi- 

cally set  aside  to  cover  sinking  fund  appropriations? 

Answer.  No.  The  setting  aside  of  assets  usually  depends  upon  the  pro- 
visions of  the  mortgage  or  upon  the  policy  of  the  company.  If  assets  are  set 
aside  they  shall  be  carried  in  account  No.  125,  "Sinking  fund  assets"  (Class 
C,  account  No.  140). 

Case  20. 

Query.  What  should  be  the  accounting  for  payments  received  and  expenses 
incurred  in  the  performance  of  custom  work  for  others? 

Answer.  The  expenses,  including  percentages  added  for  supervision,  use  of 
4$  tools,  profit,  etc.,  may  be  charged  and  the  payments  received  may  be  credited 

to  a  suspense  account,  carried  under  account  No.  120,  "  Miscellaneous  accounts 
receivable"  (Class  C,  account  No.  130) ;  any  net  profit  from  such  transactions 
shall  be  credited  to  account  No.  316,  "Miscellaneous  nonoperating  revenues" 
(Class  C,  account  No.  320).  If  the  amounts  involved  are  small,  the  expense 
may  be  charged  to  the  appropriate  operating  expense  accounts  and  the  payments 
received  shall,  in  such  cases,  be  credited  to  the  accounts  previously  charged. 

Case  21. 

Query.  What  should  be  the  accounting  for  amounts  paid  or  received  for 
options  to  bind  a  proposed  purchase,  sale,  or  lease? 

Answer.  Amounts  paid  for  options  shall,  pending  their  final  disposition,  be 
charged  to  account  No.  136,  "Other  suspense"  (Class  C,  account  No.  150). 
<!  If  the  general  project  for  which  the  option  was  obtained  Is  finally  carried  out, 

the  cost  of  the  option  shall  be  considered  as  part  of  the  price  or  rental  paid 
and  charged  to  the  appropriate  asset,  income,  or  other  account.  If  the  general 
project  is  finally  abandoned,  the  cost  shall  be  charged  to  account  No.  417, 
"Other  deductions  from  surplus"  (Class  C,  account  No.  195). 

Amounts  received  for  options  given  by  the  company  shall,  pending  their  final 
disposition,  be  credited  to  account  No.  170A,  "Other  deferred  credit  items" 
(Class  C,  account  No.  190).  If  the  transaction  Is  made  as  contemplated,  the 
amount  received  shall  be  considered  as  a  part  of  the  price  or  rental  received 
and  credited  to  the  appropriate  accounts.  If  the  option  is  forfeited,  the  amount 
originally  received  by  the  company  shall  be  credited  to  account  No.  401,  "  Mis- 
cellaneous additions  to  surplus"  (Class  C,  account  No.  195). 

Case  22. 

^  Query.  To  what  account  should  be  charged  amounts  deposited  with  munici- 

palities to  guarantee  the  proper  restoration  of  street  paving  and  other  deposits 
with  public  authorities,  the  making  of  which  does  not  rest  solely  within  the 
company's  discretion? 

Answer.  If  it  is  probable  that  the  funds  can  be  withdrawn  within  one  year 
from  the  date  of  deposit,  charge  account  No.  114,  "  Special  deposits  "  (Class  C, 
account  No.  115).  If  it  is  probable  that  funds  can  not  be  withdrawn  within 
one  year  charge  account  No.  336,  "Other  suspense"  (Class  C,  account  No. 
150),  since  In  such  cases  the  <leposlts  could  not  be  considered  working  assets 
of  the  company.     (See  Case  H.) 


12 

Case  23. 

Query.  Should  notes,  given  when  money  is  borrowed  under  an  arrangement 
requiring  a  series  of  partial  payments  which  commence  within  a  year  but  extend 
over  a  period  longer  than  one  year,  be  treated  as  funded  debt  or  notes  payable? 

Answer.  Such  notes  shall  be  treated  as  funded  debt  and  credited  to  account 
No.  153,  "Funded  debt"  (Class  C,  account  No.  165). 

Case  24. 

Query.  A  company  makes  deductions  monthly  from  the  salaries  of  its  em- 
ployees and  credits  the  amounts  deducted  to  a  hospital  fund  account.  Against 
this  account  are  charged  the  expenses  of  employees  at  private  hospitals.  In 
what  account  on  the  balance-sheet  statement  shall  the  liability  for  the  unex- 
pended portion  of  such  funds  be  shown? 

Answer.  Account  No.  170,  "  Liability  on  account  of  provident  funds  "  (Class  C, 
account  No.  190). 

Case  25. 

Query.  Section  9,  page  32,  of  the  Uniform  System  of  Accounts  for  Class  A  and 
B  companies  provides  that  all  property  having  an  expected  life  of  more  than  one 
year  (except  small  tools)  shall  be  charged  to  fixed  capital.  There  are  other 
items  of  small  value,  which,  while  having  an  expectation  of  life  of  more  than 
one  year,  are  difficult  to  keep  record  of  and  are  likely  to  be  lost  May  such 
items  be  charged  direct  to  operating  expenses? 

Answer.  Individual  items  of  small  value  (e.  g.,  amounts  less  than  $5)  classable 
as  general  equipment  under  accounts  Nos.  260  to  265  (Class  G,  account  260), 
even  though  having  an  expectancy  of  life  of  more  than  one  year,  may  be  charged 
direct  to  the  operating  expense  accounts  or  through  the  clearing  accounts. 

Case  26. 

Query.  How  should  the  "  term  of  life  "  of  items  included  in  account  No.  204, 
"Other  intangible  capital,"  be  computed,  especially  in  connection  with  those 
items  referred  to  in  section  13  of  the  Uniform  System  of  Accounts  for  Class  A 
and  Class  B  companies? 

Answer.  The  term  of  life  of  such  intangible  items  should  be  determined  by  the 
purchasing  company.  In  general,  it  should  represent  that  period  during  which 
the  intangible  value  may  be  expected  to  exist  In  the  property  apart  from  the  life 
of  the  physical  units  to  which  it  is  related. 

Case  27. 

Query.  When  a  going  or  completed  plant  has  been  purchased,  how  should 
the  appraisal  be  made  of  duplicate  or  otherwise  useless  items  which  must  be 
retired  by  the  purchasing  company? 

Answer.  If  it  is  reasonably  certain  at  the  time  when  the  appraisal  is  com- 
pleted that  some  items  of  property  must  be  disposed  of  within  a  year  after  the 
date  of  purchase,  such  items  may  be  appraised  at  their  salvage  value;  other- 
wise at  "structural  value"  (see  sec.  13,  p.  33,  of  the  Uniform  System  of  Ac- 
counts, Class  A  and  B  companies).  Particular  care  must  be  taken  to  follow 
these  retirements  so  that  upon  completion  the  prescribed  accounting  will  have 
been  effected. 


13 

Case  28. 

Query.  Does  the  term  "structural  value"  as  used  in  section  13,  page  33,  of 
I  the  Uniform  System  of  Accounts  for  Class  A  and  B  companies,  mean  structural 

value  to  the  buyer  or  to  the  seller? 
Answer.  The  structural  value  to  the  buyer  is  meant. 

Case  29. 

Query.  What  is  the  scope  of  the  word  "  appraisal "  as  used  in  section  18, 
page  33,  of  the  Uniform  System  of  Accounts  for  Class  A  and  B  companies? 

Answer.  The  requirement  that  an  appraisal  be  made  for  all  property  pur- 
chased does  not  mean  that  the  properties  should  necessarily  be  physically  in- 
A  ventoried.    When  other  and  more  economical  methods  exist  for  obtaining,  with 

reasonable  accuracy,  the  information  required  in  the  appraisal,  it  is  permissible 
to  use  such  other  methods.  If  a  physical  inventory  is  not  taken,  however, 
records  shall  be  kept  showing  upon  what  basis  the  appraisal  was  made  and  the 
facts,  expert  opinions,  and  estimates  upon  which  the  figures  were  determined. 

Case  30. 

Query.  What  items  should  be  classified  as  "  going  or  completed  plant "  under 
section  13,  page  33,  "  Plant  and  equipment  and  other  property  purchased  "  of 
the  Uniform  System  of  Accounts  for  Class  A  and  B  companies? 

Answer.  The  term  "  going  or  completed  plant "  is  intended  to  cover  only 
the  entire  plant  of  a  telephone  company  or  an  important  unit  thereof ;  such  as— 
^  (1)  A  telephone  company  as  a  whole, 

*      (2)  An  entire  central  office, 

(3)  A  system  of  lines  and  stations  within  a  given  area,  or 

(4)  A  complete  section  of  toll  plant. 

The  purchase  by  one  company  from  another  of  several  poles  and  appurte- 
nances, a  switchboard,  or  other  minor  portions  of  plant  shall  be  treated  In  the 
same  manner  as  the  purchase  of  materials  and  supplies ;  1.  e.,  the  purchasing 
company  shall  charge  the  fixed  capital  accounts  at  cost,  as  provided  In  section 
10,  page  33,  of  the  Uniform  System  of  Accounts  for  Class  A  and  B  companies. 

Case  31. 

Query.  How  should  the  following  sentence,  appearing  in  section  14,  page  34, 
of  the  Uniform  System  of  Accounts  for  Class  A  and  B  companies,  be  inter- 
preted: "The  entry  of  the  credit  to  the  fixed  capital  account  should  cite,  by 
name  and  page  of  book  or  other  record,  the  original  entry  of  cost  of  the  thing 

withdrawn"? 

Answer.  These  Instructions  should  be  applied  literally  when  large  units  of 
property,  such  as  buildings,  automobiles,  large  units  of  repair-shop  machinery, 
and,  in  general,  all  other  items  which  the  company  recognizes  and  records 
separately  on  its  books,  are  involved.  When  small  items  and  certain  relatively 
large  items  are  handled  In  such  a  volume  as  to  require  the  use  of  averages, 
which  are  based  upon  accurate  records,  It  Is  permissible  to  use  average  unit 
costs,  and  In  such  cases  It  will  not  be  necessary  to  cite  the  original  entry  of 
cost  of  the  thing  withdrawn. 


\ 


14 

Cass  32. 

Query,  When  private  branch  exchanges  and  booths  and  special  fittings  are 
retired  from  service  and  the  fixed  capital  accounts  credited,  to  what  account 
should  the  original  installation  expense  be  charged? 

Answer.  Retirements  of  private  branch  exchanges  and  booths  and  special 
fittings  shall  be  accounted  for  as  provided  in  section  14,  page  34  (Class  C,  sec. 
13,  p.  12)   of  the  Uniform  System  of  Accounts. 

The  treatment  for  the  installation  expense  of  stations  as  provided  In  ac- 
count No.  607  (Class  C,  No.  620)  is  intended  only  for  the  retirements  of  stations 
and  is  not  applicable  to  this  class  of  property. 

Case  33. 

Query.  When  contractors  perform  construction  work  for  the  telephone  com- 
pany what  should  be  the  accounting  for  amounts  received  from  or  paid  to  them 
under  the  following  conditions: 

(1)  Amounts  received  in  accordance  with  the  terms  of  contract  for  delay  in 
completion  of  work. 

(2)  Amounts  received  because  of  defective  workmanship  or  material. 

(3)  Amounts  received  because  of  abrogation  of  contract  in  whole  or  in 
part. 

(4)  Amounts  paid  for  completion  of  work  before  time  specified. 

Ans^ver.  (1)  Amounts  received,  under  the  terms  of  the  contract,  for  delayed  com- 
pletion of  work  shall  be  apportioned  and  credited  to  the  accounts  to  which  the  cost 
of  the  work  was  charged.  If,  however,  in  connection  with  delayed  construction 
additional  amounts  are  collected  in  reimbursement  of  expenses  incurred  by  or  revenues 
lost  to  the  telephone  company,  such  amounts  shall  be  credited  to  the  appropriate 
revenue  or  expense  accoimts.     (See  Case  90.) 

(2)  If  the  telephone  company  corrects  the  defects,  the  cost  of  correcting  shall  be 
charged  to  the  plant  accoimts  and  the  amounts  received  from  the  contractor  shall  be 
credited  to  the  accounts  which  Wore  charged  with  the  contract  price.  If  the  tele- 
phone company  accepts  the  work  without  correcting  the  defective  condition  and 
charges  the  plant  accounts  with  the  full  contract  price,  any  amount  recovered  from 
the  contractor  shall  be  credited  to  the  accounts  which  were  charged  with  the  contract 
price. 

(3)  Amounts  received  because  of  abrogation  of  contract  shall  be  credited  to  account 
No.  401,  "Miscellaneous  additions  to  surplus"  (Class  C,  account  No.  195). 

(4)  Amounts  paid  for  completion  of  work  before  time  specified  shall  be  apportioned 
and  charged  to  the  accounts  to  which  the  cost  of  the  work  was  charged. 

Cass  34. 

Query.  What  shall  be  the  accounting  for  improvements  on  leased  buildings? 

Answer.  In  the  case  of  leases  where  substantially  the  full  benefit  of  im- 
provements will  be  obtained,  the  cost  of  additions  to,  and  betterments  of, 
leased  property  shall  be  charged  to  a  subaccount  under  the  appropriate  fixed 
capital  (plant  and  equipment)  accounts.  Depreciation  and  retirements  in 
connection  therewith  shall  be  treated  in  the  same  manner  as  on  company-owned 
property. 

In  the  case  of  leases  where  ordinarily  the  full  benefit  of  improvements  will 
not  be  obtained  and  where  any  permanent  improvements  usually  revert  to  the 
lessor  at  the  expiration  of  the  lease,  the  cost  of  improvements,  including  the 
moving  of  partitions  and  providing  awnings,  screens,  shades,  window  venti- 
lators, etc.,  shall  be  charged  to  account  No.  133,  "  Other  prepayments,"  (Class  C, 


\ 


'^l 


15 

account  No.  145)  and  cleared  over  a  suitable  period  to  account  No.  610,  "  Other 
maintenance  expenses"  (Class  C,  account  No.  640).    Ordinarily  the  clearance 
period  should  be  the  period  of  the  lease,  but  a  shorter  period  should  be  used 
I  if  the  conditions  are  such  that  the  improvements  will  be  retired  before  the 

expiration  of  the  lease. 

The  ordinary  current  repairs,  also  minor  rearrangements  and  changes  In 
connection  witli  the  leased  buildings,  shall  be  charged  to  the  appropriate  main- 
tenance or  other  operating  expense  accounts. 

Case  35. 

Query.  What  should  be  the  accounting  for  expenditures  on   property   of 
others  Incurred  In  maintenance  or  construction  work  of  the  company? 
^  Answer.  Such  expenditures,  If  borne  by  the  company,  shall  be  treated  as  a 

part  of  the  cost  of  the  work  being  conducted  by  the  company,  e.  g.,  if  in  the 
construction  of  a  toll  pole  line  the  company  Is  obliged  to  relocate  property  ot 
another  company,  the  cost  shall  be  charged  to  account  No.  251,  "  Toll  pole  lines  " 
(Class  C,  account  No.  250). 

Case  36. 

Query.  What  should  be  the  accounting  for  donations  received  In  aid  of  con- 
struction ? 

Answer.  The  cost  of  construction  shall  be  charged  to  the  fixed  capital  (or 
plant  and  equipment)  accounts  In  accordance  with  the  rules  contained  In  the 
Uniform  Systems  of  Accounts. 

Donations  received  from  States,  counties,  municipalities,  and  other  governmental 
bodies  shall  be  credited  to  a  subaccount  entitled  "Grants  in  aid  of  construction," 
*€  and  carried  under  No.  171,  "Surplus  invested  since  December  31,  1912,  in  fixed 

capital "  (Class  C,  account  No.  195).  While  such  donations  should  be  separately 
carried  under  an  appropriate  liability  account  and  not  classified  as  surplus,  they  may, 
until  such  time  as  the  systems  of  accounts  are  reissued,  be  carried  under  account  No. 
171  (Class  C,  No.  195),  as  the  most  available  under  the  current  systems  of  accounts. 

Donations  received  from  individuals,  firms,  and  corporations  shall  be  credited  to 
account  No.  401,  "Miscellaneous  additions  to  surplus"  (Class  C,  account  No.  195), 
If  such  donations  are  not  subject  to  distribution  as  dividends,  Class  A  and  B  companies 
shall  also  charge  the  amounts  thereof  to  account  No.  415,  "Appropriations  of  surplus 
for  construction,  equipment,  and  betterments,"  and  credit  account  No.  171,  "Surplus 
invested  since  December  31,  1912,  in  fixed  capital." 

Case  37. 

*  Query.  What  should  be  the  accounting  when  a  company  sells  a  part  of  its 

'  property  for  a  lump  sum? 

Answer.  The  primary  fixed  capital  (plant  and  equipment)  accounts  Involved 
shall  be  credited  with  amounts  carried  therein  with  respect  to  the  property 
sold.  The  difference  between  the  total  amount  thus  credited  and  the  amount 
received  shall  be  treated  as  provided  in  section  14,  page  34,  of  the  Uniform 
System  of  Accounts  for  Class  A  and  B  companies;  section  13,  page  12,  for 
CUass  C  companies. 

Case  38. 

Query.  What  should  be  the  accounting  when  a  telephone  company  grants  to 
others  for  a  lump  sum  a  so-called  permanent  right  (not  right  of  way)  to  use 
a  part  of  Its  property,  or  acquires  similar  rights? 

34286^—16 3 


16 

Answer.  The  amounts  received  from  the  ^antinfir  of  such  rights  shall  be 
credited,  in  total,  by  the  grantor  to  a  subaccount  "  Property  rights  granted — Cr." 
under  account  No.  274,  "Miscellaneous  construction  expenditures"  (Class  C3, 
account  No.  270). 

The  amounts  paid  for  such  rights  shall  be  charged,  in  total,  by  the  grantee 
to  a  subaccount  "  Property  rights  acquired  "  under  account  No.  274,  "  Miscel- 
laneous construction  expenditures"  (Class  C,  account  No.  270). 

If  the  grantor  subsequently  reacquires  any  of  the  rights  originally  granted 
the  subaccount  "  Property  rights  granted — Cr."  shall  be  debited  with  the  amount 
at  which  such  rights  are  carried  in  that  account.  Similarly,  if  the  grantee 
relinquishes  any  rights  on  the  property  of  others,  it  shall  credit  the  subaccount 
"  Property  rights  acquired  "  with  the  amount  at  which  such  rights  are  carried 
in  that  account. 

While  these  items  differ  from  thoee  usually  carried  in  account  No.  274,  "Miscella- 
neous construction  expenditures"  (Class  C,  account  No.  270)  they  may  until  such 
time  as  the  systems  of  accounts  are  revised,  be  carried  in  that  account  under  the  sub- 
accounts specified  as  the  most  available  treatment  under  the  current  systems  of 
accounts. 

Case  39. 

Query.  What  should  be  the  accounting  for  amounts  paid  for  temporary 
rights,  such  as  pole  or  other  attachments  (not  right  of  way),  on  the  property 
of  others,  and  for  amounts  received  for  similar  rights  given? 

Answer.  If  compensation  therefor  is  paid  or  received  currently,  the  company 
obtaining  such  rights  shall  charge  amounts  paid  to  the  appropriate  rent  deduc- 
tion accounts,  while  the  company  giving  such  rights  shall  credit  the  appropriate 
rent  account  under  Operating  Revenues  or  Income. 

If  a  lump  sum  Is  paid  or  received  in  advance  for  such  rights,  that  amount 
should  be  given  the  usual  treatment  accorded  prepaid  Items  and  cleared  to  the 
appropriate  rent  deduction  or  rent  revenue  accounts  during  the  period  cov- 
ered by  the  right. 

Case  40. 

Query.  Should  the  fixed  capital  accounts  be  charged  with  any  portion  of  the 
pay  and  expenses  of  employees  who  are  primarily  engaged  In  maintenance  and 
operation  but  who  devote  part  of  their  time  to  construction  work? 

Answer.  An  equitable  proportion  of  the  salaries  and  exjienses  of  such  em- 
ployees may  be  charged  to  the  fixed  capital  (or  plant  and  equipment)  accounts, 
but  no  charges  shall  be  made  to  these  accounts  for  merely  Incidental  services 
of  officers  and  employees  whose  time  Is  regularly  devoted  to  the  operation  and 
maintenance  of  the  plant. 

Case  41. 

Query.  To  what  account  should  be  charged  fees  and  expenses  of  attorneys 
other  than  regular  employees  of  the  company  engaged  In  the  preparation  of 
legal  papers  required  in  the  merger  of  one  company  with  another? 

Answer.  Account  No.  201,  "Organization"  (Class  C,  account  No.  200). 

Case  42. 

Query.  To  what  account  should  be  charged  the  cost  of  plant  or  supplies  given 
or  leased  to  a  municipality  under  the  requirements  of  a  franchise,  minute, 
ordinance,  resolution,  contract,  or  other  agreement? 


• 


.» 


M 


17 

AnstDer.  If  given  as  an  initial  consideration  for  a  franchise  extending  for 
more  than  one  year,  charge  account  No.  202,  "  Franchises  "  (Class  C,  account 
No.  200) ;  if  given  annually  or  at  shorter  periods  charge  account  No.  673, 

Telephone  franchise  requirements"  (Class  C,  account  No.  680). 

If  plant  owned  by  the  company  is  rented  to  a  municipality  without  charge, 
charge  first  cost  to  the  appropriate  fixed  capital  (plant  and  equipment)  ac- 
counts. Any  maintenance  costs  incurred  on  such  plant  shall  be  charged  to 
the  appropriate  maintenance  accounts.     (See  Ca^e  103.) 

Case  43. 

Query.  To  what  account  should  be  charged  the  cost  to  the  company  of  side- 
walks on  public  streets  abutting  the  company's  property? 
Answer.  Account  No.  211,  "  Land  "  (Class  C,  account  No.  210). 

Case  44. 

Query.  What  should  l>e  the  accounting  for  pay  station  and  other  signs? 
Answer.  Signs  shall  be  classified  and  accounted  for  as  follows : 

(1)  General  company  signs,  usually  showing  name  of  company  and  of  a  some- 
what permanent  character — 

(a)  Cut  in  stone  or  painted  on  buildings  or  general  equipment :  If  in  con- 
nection with  company-owned  buildings  or  equipment,  charge  appropriate 
fixed  capital  (or  plant  and  equipment)  account  for  buildings,  general  equip- 
ment, etc. 

(6)  Metal  or  wooden  signs :  Class  as  general  equipment  and  charge  appro- 
priate fixed  capital  (or  plant  and  equipment)  account. 

(c)  Repairs  and  replacements  shall  be  treated  in  the  same  manner  as 
repairs  and  replacements  of  other  telephone  plant. 

(2)  Departmental  signs,  usually  placed  on  doors,  windows,  or  walls  for  the 
guidance  of  the  public,  but  not  for  the  purpose  of  attracting  traffic,  and  generally 
of  relatively  short  life:  Charge  appropriate  expense  account  of  particular  de- 
partment involved,  except  for  the  first  cost  of  signs  in  a  new  company-owned 
building,  which  should  be  treated  as  part  of  the  cost  of  the  building. 

(3)  Public  signs,  installed  to  attract  traffic  and  for  guidance  to  public  pay 
stations — 

(a)  If  of  relatively  large  value  and  long  life,  e.  g.,  large  electric  signs, 
class  as  general  equipment  and  charge  appropriate  fixed  capital  (or  plant 
and  equipment)  account.  Expenses  In  connection  with  such  signs  shall  be 
charged  to  account  No.  642,  "Advertising  "  (Class  C,  No.  680). 

(6)  If  of  small  value  or  short  life,  e.  g.,  metal,  glass,  paper,  cardboard, 
or  decalcomania  devices,  charge  the  cost  to  account  No.  642  (Class  C,  No. 
680). 

Case  45. 

Query.  To  what  account  should  be  charged  the  cost  of  a  retaining  wall  built 
on  a  company-owned  lot? 
Answer.  Account  No.  212,  "  Buildings  "  (Class  C,  account  No.  210). 

Case  46. 

Query.  Should  account  No.  212,  "Buildings"  (CHass  C,  account  No.  210),  in- 
clude all  items  classified  in  the  definition  of  this  account  without  regard  to  the 
amount  involved? 


18 

Answer.  No.  When  single  additions  to  or  replacements  In  buildings  are  of 
small  amount  (for  example,  less  than  $5),  the  expenditure  may  be  charged 
direct  to  the  operating  expense  accounts  or  through  the  clearing  accounts. 
(See  Case  25.) 

Case  47. 

Query.  How  should  company-owned  telephone  equipment,  installed  and  main- 
tained by  a  railroad  company  or  by  other  lessee,  be  carried  in  the  asset  accounts? 

Answer.  Charge  the  cost  to  the  telephone  company  of  such  Items  to  account 
No.  220,  "  Central  office  equipment,"  or  account  No.  230,  "  Station  equipment " 
or  the  subaccounts  thereunder  (Class  C,  account  No.  220  or  No.  230)  as  may 
be  appropriate.  ' 

Case  48. 

Query.  To  what  account  should  be  charged  the  cost  of  protectors  installed  in 
connection  with  central-office  telephone  equipment? 

Answer.  Such  protectors  when  installed  within  a  central-office  building 
whether  mounted  on  the  main  distributing  frame,  or  on  racks,  or  in  a  box  at' 
tached  to  the  interior  building  wall,  shall  l)e  charged  to  account  No  221  "  Cen- 
tral-office  telephone  equipment "  (Class  C,  account  No.  220) .  If  mounteil  outside 
the  building,  the  charge  shall  be  made  to  the  appropriate  cable  or  wire  account 

Case  49. 

Query.  To  what  account  should  be  charged  the  cost  of  creating  phantom 
circuits? 

Answer.  Account  No.  221,  "Central  office  telephone  equipment"  (Class  C,  ac- 
count No.  220),  and  the  appropriate  cable  or  wire  accounts  (exchange  or  toll) 
according  to  the  class  of  plant  worked  upon. 

Case  50. 

Query.  To  what  account  should  be  charged  the  cost  of  a  balcony  built  to  reach 
the  upper  part  of  the  main  frame? 

Answer.  Account  No.  221,  "Central  office  telephone  equipment"  (Class  C 
account  No.  220).  v       oo  v., 

Case  51. 

Query.  To  what  account  should  be  charged  the  cost  of  loading  coils  installed 
on  poles,  or  in  test  stations  and  central  offices? 

Answer.  Loading  coils  designed  primarily  for  use  on  poles  should  be  charged 
to  the  same  account  as  is  charged  the  circuit  of  which  they  are  a  part  even 
though  such  loading  coils  may  occasionally  be  used  in  central  offices  or  test 
stations. 

Loading  coils  designed  primarily  for  use  in  central  offices  should  be  charged 
to  account  No.  221,  "Central  office  telephone  equipment"  (Class  C  account 
No.  220).  ' 

Case  52. 

Query.  To  what  account  should  be  charged  the  Initial  cost  of  furniture  and 
fixtures  and  the  cost  of  repairs  and  replacements  thereof? 


19 

Answer.  (1)  The  first  cost  of  furniture  and  fixtures  shall  be  charged  to  the 
fixed  capital  accounts  as  follows: 
I  Class  A  and  B  companies  charge  to — 

No. 222.  "Other  equipment  of  central  offices."— Furniture  and  fixtures  in 
the  operating  and  terminal  rooms  of  central  offices,  In  operators' 
schools  and  in  rest  and  lunch  rooms. 
No. 235.  "Booths  and  special  fittings."— Furniture  and  fixtures  at  public 

pay  stations. 
No.  261.  "  Office  furniture  and  fixtures."— Furniture  and  fixtures  In  general 
offices,  division  offices,  and  plant,  traffic  and  commercial  offices. 
No.  262.  "  General  shop  equipment."- Furniture  and  fixtures  in  shops. 
No.  263.  "  Gleneral  store  equipment."— Furniture  and  fixtures  in  storerooms 
^^  and  storehouses. 

No.  264.  "  General  stable  and  garage  equipment"— Furniture  and  fixtures 
in  stables  and  garages. 
Class  C  companies  charge  to — 

No.  220.  "  Ontral  office  equipment."- Furniture  and  fixtures  In  the  operat- 
ing and  terminal  rooms  of  central  offices.  In  operators'  schools 
and  in  rest  and  lunch  rooms. 

No.  260.  "  General  equipment"— Other  furniture  and  fixtures. 

(2)  The  cost  of  repairs  of  furniture  and  fixtures,  and  of  replacements  when 
provision  for  replacements  has  not  been  made  in  the  depreciation  reserve  shall 
be  charged  to  the  operating  expense  and  clearing  accounts,  as  follows: 

Class  A  and  B  companies  charge  to — 
No.  604.  "  Repairs  of  central  office  equipment."— The  expense  on  furniture 
and  fixtures  carried  in  account  No.  222. 
i  No. 605.  "Repairs  of  station  equipment"— The  expense  on  furniture  and 

fixtures  carried  In  account  No.  235. 
No.  666.  "  Other  general  office  supplies  and  expenses."— The  expense  on 
furniture  and  fixtures  carried  in  account  No.  261,  except  where 
separate  offices  are  maintained  for  the  plant,  traffic,  or  com- 
mercial forces,  in  which  case  the  expenses  should  be  charged 
to  accounts  Nos.  706,  621  to  633.  Inclusive,  or  640  to  650,  inclusive, 
respectively. 
No.  701.  "  Shop  expense."— The  expense  on  furniture  and  fixtures  in  shops. 
No.  702.  "  Stable  and  garage  expense."— The  expense  on  furniture  and  fix- 
tures in  stables  and  garages. 
No.  704.  "  Supply  expense."— The  expense  on  furniture  and  fixtures  in  store- 
rooms and  storehouses. 
Class  C  companies  charge  to — 
f  No.  610.  "  Repairs  of  equipment."- The  expense  on  furniture  and  fixtures 

carried  in  account  No.  220. 
No.  680.  "  Other  general  expenses."— The  expense  on  furniture  and  fixtures 
carried  In  account  No.  260. 

(3)  The  cost  of  replacements  of  furniture  and  fixtures,  when  provision  for 
the  replacements  has  been  made  In  the  Depreciation  Reserve,  shall  be  handled 
through  the  fixed  capital  (or  plant  and  equipment)  accounts;  that  Is,  the 
cost  of  the  property  retired  or  replaced  shall  be  credited  to  the  appropriate 
fixed  capital  (or  plant  and  equipment)  accounts  and  the  new  property  shall 
be  charged  thereto. 

(4)  Inventories  or  appraisals  of  the  furniture  and  fixtures  In  use  should, 
from  time  to  time  (preferably  annually),  be  made  at  cost  prices  (estimated,  if 
not  known)   and  the  fixed  capital   (plant  and  equipment)   accounts  shall  be 


20 

adjusted  to  the  Inventoried  or  appraised  figures  by  charging  or  crediting  the 
appropriate  expense  accounts  or  the  depreciaUon  reserve,  If  the  latter  account 
is  affected. 

(5)  Companies  whose  investment ^in  furniture  and  fixtures  is  not  set  up  In 
accordance  with  the  foregoing  paragraphs  may,  upon  obtaining  special  authority 
from  the  Commission,  malce  the  necessary  adjustments  in  their  fixed  capital 
(plant  and  equipment)  accounts. 

(6)  When  furniture  Is  used  Jointly  by  two  or  more  departments,  the  prin- 
cipal function  for  which  it  is  used  should  determine  the  fixed  capital  (plant 
and  equipment)  account  to  which  the  initial  costs  should  be  charged.  Repairs 
and  replacements  of  such  furniture  should  be  charged  to  the  particular  account 
under  (2)  or  (3)  above,  in  conformity  with  the  plant  account  to  which  the 
cost  of  the  furniture  was  charged. 

Case  53. 

Query.  What  should  be  the  accounting  for  the  cost  of  awnings,  door  and 
window  screens,  window  shades,  and  analogous  items  when  InstaUed  In  owned 
buildings? 

Answer.  These  items  are  classed  as  furniture  and  fixtures  and  the  initial 
cost,  the  cost  of  replacements,  and  the  cost  of  repairs  shall  be  accounted  for 
in  the  same  manner  as  for  furniture  and  fixtures.     (See  Case  52.) 

However,  when  a  building  is  occupied  by  several  departments  of  a  telephone 
company,  the  cost  of  awnings,  door  and  window  screens,  window  shades,  and 
analogous  items,  wherever  installed,  may  at  the  option  of  the  accounting  com- 
pany be  charged  to  account  No.  261,  "  Ofllce  furniture  and  fixtures  "  (Class  C. 
account  No.  260) ;  In  such  cases,  the  maintenance  expenses  shall  be  charged  to 
account  No.  707,  "  House  service  expense  "  (Class  C,  account  No.  640). 

Oass  54. 

Query.  What  accounts  should  be  charged  with  the  cost  of  chemical  fire 
extinguishers? 

Answer.  Such  equipment  should  be  classed  as  furniture  and  fixtures  and 
charged  accordingly.     (See  Case  52.) 

Case  55. 

Query.  To  what  account  should  be  charged  the  cost  of  ••  order  table  systems  " 
Installed  for  the  use  of  department  stores  or  other  subscribers? 

Answer.  The  cost  of  the  order  table,  including  the  table  wiring,  equipment, 
table  telephone  sets  and  cost  of  installation,  shall  be  charged  to  account  No. 
234,  "Private  branch  exchanges  "  (Class  C,  account  No.  230). 

Case  56. 

Query.  To  what  account  should  be  charged  the  cost  of  pumping  water  out  of 
manholes  and  of  cleaning  manholes  and  ducts  to  permit  installation  of  new 
cable  or  for  repair  work  on  existing  cables? 

Answer.  The  expense  of  necessary  pumping  or  cleaning  in  connection  with  the 
maintenance  or  operation  of  the  plant  shall  be  charged  to  account  No.  603, 
"  Repairs  of  underground  plant "  (Class  C,  account  No.  600). 

The  cost  of  any  pumping  or  cleaning  In  connection  with  new  construction  and 
not  necessary  in  the  maintenance  or  operation  of  the  plant  shall  be  charged  to 
the  appropriate  fixed  capital  (plant  and  equipment)  accounts. 


.f 


21 

Case  57. 

Query.  To  what  account  should  be  charged  the  installation  cost  of  bridle- 
wire  cables  used  to  connect  open- wire  circuits  with  cable  circuits  or  with  central 
ofllce  equipment? 

Ansu>er.  When  used  to  connect  open-wire  circuits  with  cable  circuits,  charge 
aerial,  underground,  or  submarine  cable,  toll  or  exchange,  in  accordance  with 
the  classification  of  the  cable  connected. 

When  used  to  connect  open-wire  circuits  with  central-office  equipment,  charge 
aerial  or  underground  cable,  toll  or  exchange,  in  accordance  with  the  nature  of 
the  run  to  the  central  office,  and  the  classification  of  the  circuits  on  the  pole  line. 

Case  58. 

Query.  To  what  account  should  be  charged  the  cost  of  electrolytic  surveys 
made  to  ascertain  the  cable  protection  needed  against  electrolysis? 

Answer.  The  original  cost  shall  be  charged  to  the  cable  construction  account 
or  accounts  Involved.  Later  surveys  made  during  the  life  of  such  cable  shall 
be  charged  to  the  repair  accounts. 

Case  59. 

Query.  A  type  of  cable  Is  inclosetl  in  a  sheath  of  oakum  and  steel  and  Is 
used  underground  without  conduit  or  concrete.  To  what  account  should  be 
charged  the  cost  in  place  of  such  cable,  including  the  cost  of  trench  digging? 

Answer.  Account  No.  245,  "  Exchange  underground  cable,"  or  No.  255,  "  Toll 
underground  cable  "  (Class  C,  accounts  Nos.  240  or  250),  as  may  be  appropriate. 

Case  60." 

Query.  To  what  account  should  be  charged  the  cost  of  a  bond  or  negative 
return  attached  to  the  cable  sheath,  together  with  an  electrolysis  bond  opener 
connected  therein,  and  of  plant  to  carry  such  apparatus? 

Answer.  Charge  the  cost  of  the  bond  or  negative  return  and  the  bond  opener 
to  the  same  account  as  the  cable  protected.  Charge  the  cost  of  the  ducts,  cross 
arms,  poles,  right  of  way,  etc.,  used  to  carry  such  apparatus  (or  any  portion 
thereof  paid  for  by  the  accounting  company)  to  the  regular  fixed  capital  (or 
plant  and  equipment)  accounts.  Attachment  rentals  paid  to  other  companies 
for  such  privileges  shall  be  charged  account  No.  332,  "Rent  deductions  for 
conduits,  poles  and  other  supports  "  (Class  C,  account  No.  680). 

Case  61. 

Query.  To  what  account  should  be  charged  the  expense  of  special  protection 
at  a  high  potential  line  crossing? 

Answer.  Whether  Installed  on  the  company's  telephone  lines  or  on  the  high 
potential  line,  charge  account  No.  241,  "Exchange  pole  lines,"  or  account  No. 
251,  "Toll  pole  lines"  (Class  C.  account  No.  240  or  No.  250),  as  may  be 
appropriate  with  the  original  cost  of  the  protective  work,  and  charge  any  sub- 
sequent repairs  thereon  to  account  No.  602,  "  Repairs  of  aerial  plant "  (Class  C, 
account  No.  600). 

Case  62. 

Query.  Is  it  permissible  to  adjust  the  fixed  capital  accounts  for  general  equip- 
ment upon  the  basis  of  periodical  inventories  to  correct  discrepancies  arising 
during  the  year? 


22 

Answer.  Yes.  Adjustments  to  correct  discrepanles  arising  during  the  current 
year  may  be  made  in  accounts  Nos.  260  to  265,  inclusive  (Ciass  C,  account  No. 
260).  Concurrent  charges  or  credits  should  be  made  to  the  appropriate  expense 
accounts  or  to  the  depreciation  reserve  account,  if  the  latter  is  affected.  (See 
Case  52), 

Case  63. 

Query.  To  what  account  should  be  charged  the  cost  of  cabinets,  frames,  and 
plates  used  with  addressing  machines? 

Answer.  The  cabinets  shall  be  charged  to  account  No.  261,  "  Office  furniture 
and  fixtures"  (Class  C,  account  No.  260). 

The  frames,  plates  (or  cards),  and  similar  material,  when  purchased  for 
revenue  accounting  purposes,  should  be  charged  to  account  No.  646,  "  Revenue 
accounting,"  otherwise  to  the  appropriate  expense  account  for  printing  and  sta- 
tionery (Class  C,  account  No.  680). 

Cass  64. 

Query  Is  it  permissible  to  charge  to  account  No.  268,  "  Interest  during  con- 
struction" (Class  C,  account  No.  270)  interest  on  the  company's  working  funds 
used  in  construction  work?  If  so,  to  what  account  should  such  interest  be 
credited? 

Answer.  Account  No.  268,  "  Interest  during  construction  "  (CJlass  C,  account 
No.  270)  may  be  charged  with  interest  accruing  on  the  company's  working 
funds  used  in  construction  work.  If  this  is  done  a  subaccount  under  account 
No.  313,  "Interest  revenues"  (Class  C,  account  No,  320)  shall  be  credited. 

Cask  65. 

Query.  To  what  account  should  be  charged  insurance  premiums  paid  on 
construction  material  or  on  equipment  or  structures  under  construction? 

Answer.  Insurance  premiums  paid  on  construction  material  or  on  equipment 
or  structures  under  construction  shall  be  charged  to  specific  plant  accounts 
when  direct  allocation  to  such  plant  accounts  is  possible. 

When  such  allocation  is  not  possible,  apportion  the  cost  of  premiums  over 
the  appropriate  plant  accounts  or  charge  to  account  No.  274,  "Miscellaneous 
construction  exi)enditures  "  (Class  C,  account  No.  270). 

Case  66. 

Query.  What  should  be  the  accounting  for  premiums  on  liability  insurance 
covering  accidents  to  persons  or  damages  to  the  property  of  others  during  con- 
struction or  operations? 

Answer.  Charge  the  cost  of  premiums  to  account  No.  668,  "  Insurance  "  (Class 
C,  account  No.  680),  Subsequently,  the  proportion  of  the  premiums  applicable 
to  construction  shall  be, credited  to  account  No.  668  (Class  C,  (JSO)  and  charged 
to  the  particular  plant  accounts  where  direct  allocation  is  possible.  When 
such  allocation  is  not  possible,  apportion  the  cost  of  premiums  over  the  appro- 
priate plant  accounts  or  charge  to  account  No.  274,  "  Miscellaneous  construction 
expenditures"  (Class  C,  account  No.  270). 

Premiums  Incident  to  construction  work  only  shall  be  charged  direct  to  the 
plant  accounts  affected  or  to  account  No.  274  (CUass  C,  No.  270). 


vl. 


23 

Case  67. 

Query.  When  funded  debt  securities  which  mature  serially  are  sold  in  one 
lot  at  a  flat  discount  rate  upon  the  entire  par  value,  how  should  the  discount 
be  amortized? 

Answer.  The  discount  and  expense  shall  be  charged  to  account  No,  135,  "  Un- 
amortized debt  discount  and  expense"  (Class  C,  account  150)  and  amortized 
through  charges  to  account  No.  338,  "Amortization  of  debt  discount  and  ex- 
pense" (Class  C,  account  370)  in  such  manner  that  the  ratio  between  the 
amortization  charges  and  the  principal  of  the  securities  outstanding  will  be 
uniform  for  all  fiscal  periods. 

For  example:  A  company  issues  five  $1,000  bonds,  one  maturing  each  year. 

The  debt  discount  and  expense  on  the  issue  are  $450.  The  distribution  of  the 
discount  and  expense  should  be  as  follows : 

First  year,  principal  outstanding,  $5,000;  amortization  charge  (rate,  3  per 
cent),  $150. 

Second  year,  principal  outstanding,  $4,000;  amortization  charge  (rate,  3  per 
cent),  $120. 

Third  year,  principal  outstanding,  $3,000;  amortization  charge  (rate,  3  per 
cent),  $90. 

Fourth  year,  principal  outstanding,  $2,000;  amortization  charge  (rate,  3  per 
cent),  $60, 

Fifth  year,  principal  outstanding,  $1,000;  amortization  charge  (rate,  3  per 
cent).  $30. 

Case  68. 

Query.  To  what  account  should  be  charged  the  cost  of  printing  handbooks  contain- 
ing plant-accoirnting  instructions  and  the  cost  of  badges  furnished  plant  department 
employees? 

Answer.  Account  No.  706,  "Plant  supervision  expense"  (Class  C,  account  No.  640). 

Case  69. 

Query.  To  what  account  should  be  charged  the  expense  of  an  examination  of 
titles  of  real  property  and  other  matters  affecting  the  validity  of  an  issue  of 
bonds? 

Answer.  If  such  expense  is  incurred  in  connection  with  the  issuance  of  bonds 
It  shall  be  charged  to  account  No.  135,  "Unamortized  debt  discount  and  ex- 
pense" (Class  C,  account  No.  150)  and  written  off  by  charges  to  account  No, 
S38,  "Amortization  of  debt  discount  and  expense"  (Class  C,  account  No.  370). 
If  the  exi)ense  has  been  Incurred  in  a  suit  to  test  the  validity  of  the  bond 
Issue  it  shall  be  charged  to  account  No.  667,  "  General  law  expenses  "  (Class  C, 
account  No.  680). 

Cask  70. 

Query.  How  should  the  phrase  "  include  as  nearly  as  may  be  possible  the 
total  amount  of  the  taxes  in  the  period  to  which  they  apply,"  given  In  section 
16,  page  47,  of  the  Uniform  System  of  Accounts  for  Class  A  and  B  companies, 
be  applied? 

Answer.  (1)  Tax  assessments  for  the  Federal  Income  tax,  State  gross 
revenue  taxes  and  other  large  and  important  taxes  pertaining  to  definite  and 
known  fiscal  periods  of  the  Federal  Government,  State  or  other  large  taxing 
districts,  should  be  accrued  through  the  months  of  the  fiscal  period  to  which 
the  tax  applies.    At  the  end  of  a  company's  fiscal  year,  the  sum  of  the  monthly 

34286°— 16 4 


{ 


24 

accruals  should  equal  the  estimated  liability  of  the  company  as  of  that  date 
for  this  class  of  taxes  and,  at  the  end  of  the  period  for  which  any  tax  U  as- 
sessed, the  accruals  should  equal  the  total  of  the  tax  assessment 

(2)  Tax  assessments,  such  as  for  school  taxes,  property  taxes,  poll  taxes, 
wire  mileage  taxes,  etc.  (comprising  the  major  portion  of  tax  items),  usually 
assessed  by  local  authorities  and  covering  fiscal  periods  more  or  less  uncertain, 
may  be  accrued  through  the  months  of  the  fiscal  period  in  which  they  must  be 
paid.  At  the  end  of  the  company's  fiscal  year,  the  monthly  accruals  made 
during  the  year  should  equal  payments.  In  making  accruals.  It  is  unnecessary 
to  consider  each  tax  separately,  but  rather  the  whole  class  should  be  consid- 
ered by  means  of  general  comparisons  with  similar  periods  of  preceding  years, 
exi)ected  changes,  etc 

Case  71. 

Query.  What  should  be  the  accounting  for  taxes  on  materials  and  supplies 

carried  In  stock? 

Answer.  Taxes  on  materials  and  supplies  carried  In  stock  should,  as  a  general 
rule,  be  charged  to  account  No.  305,  "  Taxes  assignable  to  operations  *'  (Class 
C,  account  No.  350).  In  specific  cases,  however,  where  materials  and  supplies 
are  definitely  assigned  to  be  used  In  construction  work,  the  proportion  of  taxes 
applicable  to  such  materials  and  supplies  may  be  allocated  to  the  appropriate 
plant  accounts  or  charged  to  account  No,  273,  "Taxes  during  construction'* 
(Class  C,  account  No.  270). 

Cass  72. 

Query.  When  the  expenses  of  a  State  utilities  commission  are  borne  by  the 
utilities  and  apportioned  among  them,  to  what  account  should  be  charged  a 
company's  proportion  of  such  exi)enses? 

Answer.  Account  No.  305,  "  Taxes  assignable  to  operations "   (Class  O,  No. 

350). 

Case  73. 

Query.  To  what  accounts  should  be  charged  the  cost,  when  borne  by  the  com- 
pany, of  internal  revenue  stamps  required  under  the  act. entitled  "An  act  to 
Increase  the  internal  revenue,  and  for  other  purposes,"  approved  October  22. 

1914? 

Answer.  The  cost  of  internal  revenue  stamps  purchased  directly  from  the 
Government  or  its  agents  should,  as  a  general  rule,  be  charged  to  account  No. 
305,  "Taxes  assignable  to  operations"  (Class  C,  account  No.  350).  In  im- 
portant and  exceptional  cases  other  appropriate  accounts  shall  be  charged ;  e.  g., 
the  expense  of  stamps  in  connection  with  new  Issues  of  capital  stock  shall  be 
charged  to  account  No.  201,  "Organization"  (Class  C,  account  No.  200)  ;  the 
expense  of  stamps  in  connection  with  new  construction  work  shall  be  charged 
to  the  appropriate  fixed  capital  (plant  and  equipment)  accounts,  and  the  ex- 
pense of  stamps  in  connection  with  the  Issuance  of  funded  debt  shall  be  charged 
to  account  No.  135,  "Unamortized  debt  discount  and  expense"  (Class  0,  ac- 
count No.  150)  and  amortized  over  the  life  of  the  debt. 

Indirect  expenditures  for  internal  revenue  stamps  shall  be  charged  to  the 
appropriate  departmental  or  other  accounts;  e.  g.,  when  an  express  company 
aflfixes  stamps  to  bills  of  lading  and  transfers  the  charge  to  the  telephone  com- 
pany the  cost  should  be  included  as  a  part  of  the  cost  of  transportaUon. 


wl 


25 

Case  74. 

Query.  To  what  account  should  franchise  taxes  paid  periodically  be  charged? 
Answer.  Account  No.  305,  "Taxes  assignable  to  operations"   (Class  C,  ac- 
count No.  350). 

Case  75. 

Query.  To  what  account  should  be  credited  rentals  from  Instruments  leased 
to  connecting  companies? 

Answer.  Account  No.  311,  "  Miscellaneous  rent  revenues  "  (Class  C,  account 
No.  320).  This  does  not  apply  to  the  case  where  Instruments  and  general 
supervision  are  furnished  under  an  agreement  for  apportioning  the  revenues 
of  the  licensee.  In  this  case,  account  No.  526,  "  Licensee  revenue— Cr."  (Class 
C,  account  No.  530)  shall  be  credited. 

Case  76. 

Query.  When  in  connection  with  collateral  trust  bonds,  the  trustee  holds 
certain  securities  against  the  contingency  of  default  by  the  debtor  company, 
the  income  on  such  collateral  being  the  property  of  the  debtor  company,  to 
what  account  should  such  income  be  credited? 

Answer.  Account  No.  312,  "  Dividend  revenues  "  or  account  No.  313,  "  Interest 
revenues  "  (Class  C,  account  No.  320)  as  may  be  appropriate. 

Case  77. 

Query.  What  is  the  significance  of  the  phrase  "  if  the  fund  is  required  to  be 
represented  by  a  reserve  "  in  Note  B  under  Class  A  and  B  account  No.  314, 
"  Sinking  and  other  reserve  fund  accretions"? 

Answer.  The  phrase  refers  to  the  provision  of  the  deed  of  trust  or  other 
contract,  or  to  the  policy  of  the  company,  and  not  to  any  requirement  of  the 
Uniform  System  of  Accounts. 

Case  78. 

Query.  The  text  of  accounts  No.  335,  "  Interest  deductions  for  funded  debt " 
(Class  C,  account  No.  360),  and  No.  314,  "  Sinking  and  other  reserve  fund  ac- 
cretions," excludes  Interest  on  securities  Issued  or  assumed  by  the  company. 
A  company  has  In  a  sinking  fund  both  securities  of  its  own  issue  and  securities 
assumed  by  It,  the  Interest  on  which  under  the  terms  of  the  mortgage  is  to 
accumulate  in  the  fund.    What  should  be  the  accounting  for  such  interest? 

Answer.  If  the  deed  of  trust  or  policy  of  the  company  requires  that  the  Interest 
eccrulng  on  such  securities  accumulate  to  the  sinking  fund,  the  accounting  for 
the  interest  shall  be  as  follows: 

(1)  Class  A  and  B  companies  shall  charge  amounts  equal  to  such  interest 
to  account  No.  350,  "Appropriations  of  Income  to  sinking  and  other  reserve 
funds,"  and  credit  similar  amounts  to  account  No.  172,  "  Surplus  invested  in 
sinking  funds."  When  the  cash  is  turned  over  to  the  trustees,  or  to  the  fund, 
charge  account  No.  125,  "Sinking  fund  assets,"  and  credit  account  No.  113, 
"  Cash."  If  no  reserve  is  to  be  set  up  to  cover  the  fund  the  charge  to  account 
No.  350  and  credit  to  account  No.  172  should  be  omitted. 

(2)  Class  C  companies  shall  charge  amounts  equal  to  such  Interest  to  account 
No.  370,  "Miscellaneous  charges  to  Income,"  and  credit  a  subaccount  under 
account  No.  195,  entitled  "  Surplus  invested  in  sinking  funds."  When  the  cash 
is  turned  over  to  the  trustees  or  to  the  fund,  charge  account  No.  140,  "  Special 


26 

funds,"  and  credit  account  No.  115,  "  Cash."  If  no  reserve  Is  to  be  set  up  to 
cover  the  fund,  the  charge  to  account  No.  370  and  credit  to  account  No.  195 
should  be  omitted. 

Case  79. 

Query.  To  what  account  sliould  be  cliarged  the  amounts  of  bills  covering  the 
sale  of  small  quantities  of  supplies  or  the  cost  of  work  done  for  others,  which 
have  proved  to  be  uncollectible? 

Answer.  Account  No.  323,  "Uncollectible  nonoperating  revenues"  (Class  C, 
account  No.  680).  Charges  to  subscribers  for  moves  and  changes  of  telephone 
equipment  which  have  been  credited  to  account  No.  607,  "  Station  removals 
and  changes"  (Class  C,  account  No.  (J20),  in  anticipation  of  collection,  and 
which  have  proved  to  be  uncollectible,  shall  be  charged  to  account  No.  607 
(Class  C,  No.  620). 

Case  80. 

Query.  What  should  be  the  accounting  for  maintenance  and  operating  ex- 
penses in  connection  with,  and  rents  received  from,  space  leased  to  others  in 
buildings  partly  occupied  by  the  telephone  company? 

Answer.  If  the  expenses  of  maintaining  and  operating  the  rented  portion  can 
be  separated  accurately  from  the  expenses  on  the  portion  used  by  the  company, 
such  expense  shall  be  charged  to  account  No.  320,  "Rent  expense"  (Class  C, 
account  No.  320),  and  the  rent  received  shall  be  credited  to  account  No.  311, 
"  Miscellaneous  rent  revenues  "  (Class  C,  account  No.  320).  The  expense  on  the 
portion  of  building  used  by  the  company  shall  be  charged  to  the  appropriate 
operating  expense  accounts. 

If  the  expense  on  the  rented  portion  can  not  be  separated  accurately,  the 
entire  expense  shall  be  charged  to  the  operating  expense  accounts,  and  the 
rent  received  shall  be  credited  to  account  No.  505,  "  Minor  rents  of  exchange 
plant "  (Class  C,  account  No.  500)  If  building  is  used  by  the  company  ex- 
clusively for  exchange  purposes,  to  account  No.  515,  "  Minor  rents  of  toll  plant " 
(Class  C,  account  No.  510)  if  building  is  used  exclusively  for  toll  purposes,  or 
to  account  No.  524,  "  Rents  from  other  operating  property  "  (Class  C,  account 
No.  520)  if  building  is  used  for  both  exchange  and  toll  purposes. 

In  the  case  of  a  large  property,  where  the  company  uses  only  a  minor  portion 
and  the  expenses  can  be  apportioned  on  an  equitable  basis,  it  is  desirable 
to  use  accounts  Nos  .311  and  320  (Class  C,  No;  320). 

Case  81. 

Query.  What  should  be  the  accounting  when  a  lessee  company  pays  Interest 
or  dividends  on  the  securities  of  a  lessor  company  In  accordance  with  the  terms 
of  the  rental  agreement  between  them? 

Answer.  The  amounts  so  paid  shall  be  charged  by  the  lessee  to  account 
No.  330,  "  Rent  deductions  for  lease  of  telephone  plant "  (Class  C,  account  No. 
370),  and  credited  by  the  lessor  to  account  No.  310,  "Rent  revenues  from  lease 
of  telephone  plant "  (Class  C,  account  No.  320). 

Case  82. 

Query.  To  what  account  should  be  charged  the  cost  of  minor  work  done  In 
lieu  of  cash  payments  for  pole  locations,  poles,  and  other  supports,  e.  g.,  main- 


27 

tenance  of  telegraph  lines  of  a  railroad  company  In  return  for  right-of-way 
privileges? 

Answer.  Account  No.  602,  "  Repairs  of  aerial  plant "  (Class  C,  account  No. 
600). 

Case  83. 

Query.  To  what  account  should  be  charged  amounts  paid  periodically  to  a 
railroad  company  for  permission  to  cross  Its  right  of  way,  the  right  being 
reserved  to  revoke  the  permission  at  pleasure? 

Answer.  Account  No.  334,  "  Miscellaneous  rent  deductions "  (Class  C,  ac- 
count No.  680). 

Case  84. 

Query.  To  what  account  should  be  charged  rents  paid  for  pole  locations? 
Answer.  Account  No.  332,  "  Rent  deductions  for  conduits,  poles,  and  otJier 
supports"  (Class  C,  account  No.  680). 

Case  85. 

Query.  To  what  account  should  be  charged  rents  paid  for  the  use  of  cir- 
cuits? 

Answer.  Account  No.  334,  "  Miscellaneous  rent  deductions "  (Class  C,  ac- 
count No.  680). 

Case  86. 

Query.  What  should  be  the  accounting  when  property  leased  by  the  account- 
ing company  Is  subleased,  In  whole  or  in  part,  to  others? 

Answer.  Property  subleased  to  others  shall  be  accounted  for  as  if  the  ac- 
counting company  were  leasing  Its  own  property. 

If,  however,  the  accounting  company  acts  only  In  the  capacity  of  an  agent 
without  profit  In  leasing  property  for  others,  the  receipts  from  lessee  and  the 
payments  to  lessor  may  be  applied  to  the  same  primary  account  or  cleared 
through  a  suspense  account. 

Case  87. 

Query.  The  coupons  on  certain  securities  contain  a  stipulation  that  If  not 
paid  on  date  of  maturity  the  coupons  shall  bear  Interest  from  that  date.  To 
what  account  should  the  Interest  on  the  coupons  be  charged? 

Answer.  Account  No.  336,  "Other  Interest  deductions"  (Class  C,  account 
No.  360). 

Case  88. 


Query.  A  company  sells  short-term  notes  because  the  money  market  does  not 
warrant  the  sale  of  the  bonds  which  are  deposited  as  collateral  for  the  notes. 
Is  It  permissible  to  spread  the  discount  on  the  notes  over  the  life  of  the  bonds, 
treating  the  sale  and  retirement  of  both  notes  and  bonds  as  one  transaction? 

Answer.  The  sale  and  retirement  of  the  notes  shall  be  separately  considered 
and  the  discount  suffered  on  the  notes  shall  be  charged  to  account  No.  336, 
"Other  interest  deductions"  (Class  C,  account  No.  360). 


28 

Case  89. 

Query.  To  what  account  should  be  charged  Interest  paid  on  taxes  overdue 
and  unpaid? 
Answer.  Account  No.  336,  "Other  interest  deductions"    (Class  C,  account 

No.  360). 

Case  90. 

Query.  What  should  be  the  accounting  treatment  in  connection  with  delayed 
items  of  revenue,  expense,  or  income? 

Answer.  Delayed  items  of  revenue,  expense,  or  income  shall  be  credited  or 
charged  to  the  same  account  as  would  have  been  credited  or  charged  if  the 
items  had  been  taken  up  in  the  period  to  which  they  pertained.  If,  however, 
the  amounts  involved  are  deemed  sufficient  to  impair  comparisons  unduly  and 
the  company  does  not  desire  to  charge  them  to  the  current  accounts,  adjust- 
ments may  be  made  through  the  surplus  or  deficit  accounts  (Class  A  and  B, 
accounts  Nos.  401  and  417;  Class  C,  account  No.  195)  upon  obtaining  si^ecial 
authority  from  the  Interstate  Commerce  Commission. 

Case  91. 

Query.  What  should  be  the  accounting  treatment  In  connection  with  adjust- 
ments of  errors  in  the  revenue,  expense,  and  income  accounts  of  a  prior  fiscal 

year? 

Answer.  Errors  In  the  revenue,  expense,  and  Income  accounts  of  a  prior  fiscal 
year  should  be  adjusted  through  the  revenue,  expense,  and  income  accounts, 
respectively,  of  the  year  In  which  the  errors  are  discovered.  If,  however,  the 
amounts  Involved  are  deemed  sufficient  to  Impair  comparisons  unduly  and  the 
company  does  not  desire  to  charge  them  to  the  current  accounts,  adjustments 
may  be  made  through  the  surplus  or  deficit  accounts  (Class  A  and  B,  accounts 
Nos.  401  and  417;  Class  C^  account  No.  195)  upon  obtaining  special  authority 
from  the  Interstate  Commerce  Ck)mml8slon. 

Case  92. 

Query.  To  what  account  should  be  credltetl  an  amount  received  for  the  sur- 
render of  an  unexpireil  lease  on  property? 

Answer.  Account  No.  401,  "Miscellaneous  additions  to  surplus"  (CHass  C, 
account  No.  195). 

Case  93. 

Query.  When  the  securlt'es  of  a  telephone  company  are  reacquired,  and  then 
resold  at  a  price  other  than  par,  what  should  be  the  accounting  for  the  difference 
between  the  sale  price  and  the  par  value? 

Answer.  Credit  any  profit  to  account  No.  401,  "Miscellaneous  additions  to 
surplus"  (Class  C,  account  No.  195),  and  debit  any  loss  to  account  No.  417, 
"Other  deductions  from  surplus"  (Class  C,  account  No.  195).  The  discount 
and  premium  accounts  referred  to  In  section  6,  "Discount  and  premium  on 
capital  stock,"  and  section  7,  "  Discount,  expense  and  premium  on  funded  debt/* 
In  the  Uniform  System  of  Accounts  (Class  C,  accounts  Nos.  150  and  190),  are 
provided  only  for  the  initial  sales  of  securities  and  are  not  applicable  to  the 
class  of  transaction  under  consideration. 


29 

Case  94. 

Query.  What  should  be  the  accounting  for  funds  on  deposit  with  a  bank 
which  has  failed? 

Answer.  Pending  the  determination  of  the  actual  loss,  such  amounts  shall  be 
carried  in  account  No.  136,  "Other  suspense  "  (Class  C,  account  No.  150).  When 
determined,  the  amount  lost  shall  be  charged  to  account  No.  675,  "  Other  gen- 
eral expenses"  (Class  C,  No.  680);  amounts  recovered  thereafter  shall  be 
credited  to  account  No.  675  (Class  C,  No.  680). 

Case  95. 

Query.  What  should  be  the  accounting  for  amounts  billed  subscribers  under 
the  following  conditions: 

(1)  When  the  bill  is  rendered  in  gross  amount  and  a  discount  allowed  for 
payment  within  a  specified  period. 

(2)  When  the  bill  Is  rendered  In  net  amount  and  an  additional  amount  is 
charged  to  subscribers  who  do  not  make  settlement  within  a  specified  period. 

Answer.  (1)  Either  the  gross  or  net  amount  of  the  bills  may  be  recorded  on 
the  subscribers'  ledger  at  the  time  the  bills  are  rendered. 

(c)  If  the  gross  amount  of  the  bills  is  recorded  on  the  subscribers* 
ledger,  such  discounts  as  are  taken  by  subscril>ers  shall  be  credited  to  their 
accounts  and  charged  to  account  No.  500,  "  Subscribers'  station  revenues  ** 
(Class  C,  account  No.- 500),  or  other  account  to  which  the  gross  amount  of 
the  bill  was  previously  credited. 

(&)  If  the  net  amount  of  the  bills  is  recorded  on  the  subscribers'  ledger, 

discounts  neglected  shall  be  entered  against  the  appropriate  subscribers' 

accounts  at  the  end  of  the  discount  period  and  credited  to  account  No.  500, 

"Subscribers'  station  revenues"    (Class  C,   account  No.   500),   or   other 

account  to  which  the  net  amount  of  the  bill  was  previously  credited. 

(2)  The  net  amount  of  the  bill  shall  be  recorded  on  the  subscribers'  ledger. 

When  the  specified  time  for  payment  expires,  the  additional  amount  charged 

shall  be  entered  against  the  accounts  of  such  subscribers  as  have  not  made 

settlement  and  credited  to  account  No.  500,  "  Subscribers'  station  revenues " 

(Class  C,  account  No.  500),  or  other  account  to  which  the  net  amount  of  the 

bin  was  previously  credited. 

Case  96. 

Query.  The  text  of  Class  A  and  B  account  No.  304  permits  companies  to 
carry  a  subaccount  under  account  No.  118,  "  Due  from  subscribers  and  agents," 
comprising  a  reserve  for  uncollectible  revenue  accounts.  If  this  subaccount  Is 
kept,  should  It  be  closed  out  at  the  end  of  each  year  or  may  a  balance  be 
carried  forward  to  the  succeeding  year? 

Answer,  If  this  method  of  accounting  for  uncollectible  operating  revenues 
is  followed,  there  should  be  carried  forward  In  this  subaccount  to  the  succeed- 
ing year  a  balance  representing  as  nearly  as  possible  that  proportion  which  will 
prove  to  be  uncollectible  of  the  total  amount  of  outstanding  bills  for  operating 
revenues. 

If  Class  C  companies  desire  to  set  up  a  reserve  for  uncollectible  operating 
revenues,  monthly  charges  should  be  made  to  account  No.  370,  "  Miscellaneous 
charges  to  income,"  and  concurrent  credits  to  a  subaccount  under  account  No. 
125,  "Due  from  subscribers  and  agents."  The  balance  in  this  subaccount  at  the 
end  of  the  year  should  be  treated  as  provided  in  the  above  paragraph.  {See 
Case  97,) 


30 


31 


Case  97. 

Query.  What  should  be  the  accounting  for  operating  revenues  charged  off  as 
uncollectible  but  recovered  later  upon  resumption  of  service  or  otherwise? 

Answer.  Credit  the  subaccount  comprising  the  reserve  for  uncollectible  ac- 
counts under  account  No.  118,  "  Due  from  subscribers  and  agents  "  (Class  C, 
accounts  No.  125),  if  such  subaccount  is  kept;  otherwise  credit  account  No.  304, 
"  Uncollectible  operating  revenues  "  (Class  C,  account  No.  370).     (See  Case  96.) 

Case  98. 

Query.  To  what  account  should  be  charged  permit  fees  paid  to  municipalities, 
counties,  and  other  governmental  bodies  In  connection  with  the  initial  location 
of  poles  or  conduits? 

Answer.  Account  No.  207,  "  Right  of  way  "  (Class  C.  accounts  Nos.  240  or 
250,  as  may  be  appropriate). 

Case  99. 

Query.  To  what  account  should  be  credited  amounts  received  from  other  tele- 
phone companies  as  compensation  for  the  terminal  handling  of  toll  messages? 

Answer.  Account  No.  510,  "Message  Tolls"  (Class  C,  account  No.  510).  In 
general,  message  toll  revenue  includes  (1)  the  revenue  from  messages  trans- 
mitted entirely  over  the  company's  own  toll  lines,  (2)  the  company's  propor- 
tion of  revenue  (usually  termed  "prorate"  or  "mileage")  from  messages 
transmitted  partly  over  the  company's  own  toll  lines  and  partly  over  the  toll 
lines  of  other  companies,  (3)  amounts  received  as  compensation  for  switch- 
ing messages  between  the  toll  lines  of  other  companies,  and  (4)  commissions  or 
amounts  representing  a  division  of  revenue  received  as  compensation  for  origi- 
nating or  terminating  toll  messages  of  other  companies. 

Case  100. 

Query.  What  should  be  the  accounting  for  slugs,  etc.,  and  for  counterfeit  or 
mutilated  coins  coUectetl  from  coin  box  stations? 

Ansicer.  Any  necessary  adjustment  for  such  Items  shall  he  made  through 
the  Operating  Revenue  accounts  since  these  shall  Include  In  such  cases  only 
the  face  value  of  the  legal  tender  coin  collected. 

Case  101. 

Query.  To  what  account  should  be  charged  amounts  paid  subscribers  for 
directory  or  traffic  service  errors  affecting  telephone  service? 

Answer.  Abatements  of  charges  billed  subscribers  when  allowed  for  directory 
or  traffic  service  errors  affecting  telephone  service  shall  be  charged  to  the  oper- 
ating revenue  account  or  accounts  previously  credited  with  respect  to  the  par- 
ticular service.  (See  sec.  19.  p.  60,  for  CUass  A  and  B  companies;  accounts 
500  and  510  for  Class  C  companies.)  Any  additional  payments  resulting  from 
such  errors  shall  be  charged  to  account  No.  669,  "Accidents  and  damages" 
(Class  C,  account  No.  680). 


«         to 


t  m  t 

7      J      t 


Case  102. 

Query.  To  what  account  should  be  charged  amounts  paid  In  connection  with 
errors  in  directory  advertising? 

Answer,  Abatements  of  charges  allowed  for  directory  advertising  errors  shall 
be  charged  to  account  No.  523,  "Advertising  and  directory  "  (Class  C,  account 
No.  520).  Any  additional  payments  resulting  from  such  errors  shall  be  charged 
to  account  No.  669,  "Accidents  and  damages"  (Class  C,  account  No.  680). 

Case  103. 

Query.  What  should  be  the  accounting  w^hen  telephone  service  is  given  at 
other  than  standard  rates? 

Answer.  (1)  If  given  to  employees,  ministers,  charitable  institutions,  etc., 
credit  the  revenue  accounts  with  the  actual  amounts.  If  any,  charged  for  the 
service.  No  adjustment  shall  be  made  between  the  revenue  and  other  accounts 
for  the  reduction  from  standard  rates. 

(2)  If  given  in  accordance  with  specific  franchise  requirements,  including 
service  given  to  nmnlclpalitles  for  right  of  way,  pole  location,  etc.,  charge  the 
standard  rates  for  such  .service  to  account  No.  673,  "  Telephone  franchise  re- 
quirements" and  credit  similar  amounts  to  account  No.  676",  "Telephone 
franchise  requirements— Cr."  (Class  C,  companies  shall  not  Include  such  items 
in  either  the  revenue  or  expense  accounts).     (See  Case  ^2.) 

(3)  If  given  for  specific  return  other  than  to  municipalities,  e.  g.,  for  rights 
of  way,  advertising,  etc.,  credit  the  revenue  accounts  at  the  standard  rates 
for  such  service.  Any  reduction  from  standard  rates  shall  be  charged  to  the 
appropriate  expense  or  income  deduction  account. 

Case  104. 

Query.  To  what  accounts  should  the  exchange  revenue  from  hotel  or 
department  store  contracts  and  from  guarantee  coin  box  exchange  service  be 

credited? 

Answer.  1.  When  such  service  Is  established  specifically  for  general  public 
use,  the  revenue  shall  be  credited  to  account  No.  501,  "Public  pay  station 
revenues"  (Class  C,  account  No.  500)  as  follows: 

(a)  The  total  amount  of  the  exchange  service  revenue  billed  under  con- 
tract, or  the  amount  collected  with  respect  to  exchange  service  from  the 
coin  box  If  equal  to  or  In  excess  of  the  guarantee.  Any  commission  or 
amount  retained  by  or  paid  to  the  guarantor  shall  be  charged  account  No. 
648,  "Pay  station  commissions"  (Class  C,  account  No.  680). 

(D)  The  full  amount  of  the  guarantee  If  the  amount  collected  from  the 
coin  box  with  respect  to  exchange  service  Is  less  than  the  guarantee. 

(2)  When  such  service  is  not  established  specifically  for  general  public  use, 
the  exchange  service  revenue  billed  or  the  full  amount  of  the  guarantee,  plus 
whatever  net  additional  amount  Is  due  the  telephone  company,  shall  be  credited 
to  account  No.  500,  "  Subscribers'  station  revenues"  (Class  C,  account  No.  500). 

(3)  In  exceptional  cases  when  a  telephone  system,  owned  by  a  hotel,  store, 
or  other  establishment,  receives  central-office  service  from  the  company,  the 
revenue  shall  be  credited  to  account  No.  503,  "Service  stations"    (Class  C, 

account  No.  500). 

Case  105. 

Query.  What  is  the  proper  accounting  for  messenger  service  receipts  and 
disbursements  which  are  Incident  to  delivering  messages  and  notifying  persons 
of  calls  at  telephone  stations? 


Ilfc 


32 

Answer.  Messenger  service  revenue  from  subscribers  and  other  telephone 
companies  shall  be  credited  to  account  No.  520,  "  Messenger  service  "  (Class  O, 
account  No.  520). 

The  salaries  paid  to  messengers  who  are  in  the  company's  employ  shall  be 
charged  to  account  No.  630,  "Messenger  service"  (Class  C,  account  No.  660). 
Amounts  paid  to  messengers  who  are  not  in  the  company's  employ  and  amounts 
collected  for  and  paid  to  other  telephone  companies  for  messenger  service  shall 
be  charged  to  account  No.  520,  "  Messenger  service"  ((^ass  C,  account  No. •520). 

Case  106. 

Query.  To  what  account  should  be  credited  the  rent  received  for  rooms 
leased  to  the  local  manager  for  personal  ( nonofflclal )  use  In  a  building  rented 
by  the  telephone  company  for  central  office  purposes? 

Anstcer.  Account  No.  505,  "  Minor  rents  of  exchange  plant "  (Class  C,  ac- 
count No.  500)  If  building  Is  used  by  the  company  exclusively  for  exchange 
purposes,  to  account  No.  515,  "Minor  rents  of  toll  plant"  (Class  C,  account 
No.  510)  If  building  Is  used  exclusively  for  toll  purposes,  or  to  account  No. 
524,  "  Rents  from  other  operating  property  "  (Class  C,  account  No.  520)  If 
building  Is  used  for  both  exchange  and  toll  purposes. 

Case  107. 

Query.  To  what  account  should  be  credited  unclaimed  refunds  on  telephone 
service? 

Answer.  Account  No.  525,  "Other  miscellaneous  revenue"  (CUass  C,  account 
No.  520). 

Case  108. 

Query.  To  what  account  should  be  credited  unclalmcvl  Lubscrlbers'  deposits, 
dividends,  and  wages? 

Answer.  Such  Items  should  be  carried  under  the  appropriate  accounts  pay- 
able until  the  expiration  of  the  company's  liability.  At  the  end  oif  a  fiscal 
year,  or  more  frequently  If  advisable,  Items  which  have  been  carried  for  the 
required  period  shall  be  credited  to  account  No.  401,  "  Miscellaneous  additions 
to  surplus"  (Class  C,  account  No.  195). 

Case  109. 

Query.  To  what  account  should  be  credited  revenue  received  from  "battery 
taps,"  I.  e.,  electrical  power  furnished  others  from  the  central  office  batteries? 

Answer.  Account  No.  525,  "Other  miscellaneous  revenue"  (Class  C,  account 
No.  520). 

Case  110. 

Query.  When  the  duties  of  employees  are  varied  and  a  small  amount  of  time 
is  spent  on  each  duty,  thus  affecting  a  number  of  accounts.  Is  It  required  that 
their  pay  and  expense  be  distributed  on  the  basis  of  the  actual  time  spent? 

Answer.  The  pay  and  expenses  of  employees  shall  be  distributed  to  the  ac- 
counts as  nearly  as  may  be  possible  on  basis  of  the  time  actually  spent  on  each 
class  of  work.  However,  If  the  time  Is  so  split  up  as  to  make  such  a  distribution 
Impracticable,  and  If  the  emploj^ee  does  the  same  classes  of  work  from  day  to 
day,  his  pay  and  expenses  may  be  distributed  by  the  use  of  percentages  based 
on  a  study  of  the  time  actually  spent  In  a  representative  period,  such  percent- 
ages being  corrected  from  time  to  time  as  the  facts  warrant. 


•  > 


33 

Case  111. 

Query.  When  one  department  performs  services  or  prepares  data  for  anoth^ 
department,  should  any  transfer  of  expense  be  made  in  the  accounts? 

Answer.  When,  In  the  ordinary  conduct  of  business.  It  Is  necessary  that  one 
department  perform  services  for  or  furnish  data  to  another  department,  no 
transfer  of  expense  Is  required. 

Where  the  employees  of  one  department  perform  an  extensive  service  which 
is  the  function  of  another  department,  the  expense  shall  be  transferred  to 
such  department  and  charged  to  the  accounts  affected;  but  no  transfer  of 
expense  Is  required  to  be  made  for  Incidental  services  performed  for  one  depart- 
ment by  another.  For  example,  if  the  traffic  department  rates  and  sorts  toll 
tickets,  makes  check  ledger  entries,  and  prepares  reports  to  facilitate  the  work 
of  the  department  performing  the  function  of  revenue  accounting,  such  service 
being  Incidental  to  the  work  of  the  traffic  department,  the  expense  may  be  borne 
by  the  traffic  department 

Case  112. 

Query.  To  what  account  should  be  charged  the  pay  and  expenses  of  man- 
agers at  small  exchanges  who  are  engaged  In  constructing  and  maintaining 
the  plant  and  In  traffic  and  commercial  operations? 

Answer.  Construction  and  maintenance  costs  shall  be  charged  to  the  appro- 
priate fixed  capital  (plant  and  equipment)  and  maintenance  accounts,  respec- 
tively, and  the  remainder  shall  be  distributed  to  the  appropriate  traffic  and  com- 
mercial expense  accounts.  If  It  Is  impracticable  to  distribute  the  charges  to 
the  traffic  and  commercial  expense  accounts  on  the  basis  of  actual  time  spent, 
the  distribution  may  be  made  on  a  percentage  basis. 

Case  113. 

Query.  To  what  account  should  be  charged  the  commissions  paid  to  exchange 
agents  or  managers  in  lieu  of  salary,  operating  expenses,  etc.? 

Answer.  Any  construction  or  maintenance  costs  having  been  first  deducted 
and  charged  to  appropriate  accounts,  the  remainder  shall  be  divided  between 
Traffic  and  Commercial  Expenses  by  means  of  percentages  agreed  upon  by  these 
departments.  Class  C  companies,  after  charging  construction  and  maintenance 
accounts  according  to  fact,  shall  charge  the  remainder  to  account  No.  670,  "  Gen- 
eral office  salaries." 

Case  114. 

Query.  To  what  account  should  be  charged  the  pay  and  exi)enses  of  foremen 
and  subforemen  of  repair  gangs? 

Answer.  Their  pay  and  expenses  shall  be  distributed  over  the  various  main- 
tenance accounts  In  the  same  manner  as  that  of  employees  under  their  super- 
vision. The  repair  accounts  shall  Include  the  cost  of  direct  supervision  such 
as  that  of  the  foremen  and  subforemen  while  the  cost  of  general  maintenance 
supervision  such  as  that  of  the  general,  divisional,  and  district  plant  superin- 
tendents shall  be  charged  to  account  No.  601,  "  Supervision  of  maintenance " 
(Class  C,  account  No.  670). 


34 

Case  115. 

Query.  To  what  account  should  be  charged  the  pay  and  expenses  of  trouble- 
men  engaged  to  some  extent  in  traffic  worlc? 

Answer.  The  pay  and  expenses  of  troublemen  shall  be  distributed  to  the  sev- 
eral maintenance,  traffic,  or  other  accounts  involved  in  their  work.  (See  Cotes 
110  and  111.) 

Case  116. 

Query.  To  what  account  should  be  charged  the  pay  and  expenses  of  wire 
chiefs? 

Answer.  The  pay  and  exi)enses  of  wire  chiefs  shall  be  distributed  to  the  sev- 
eral maintenance,  traffic,  or  other  accounts  involved  in  their  work.  (See  Ctises 
110  and  111.) 

Case  117. 

Query.  Must  specific  authorization  be  obtained  from  the  Interstate  CJom- 
merce  Commission  whenever  It  is  desired  to  spread  over  a  period  large  items 
of  expense  due  to  Judgments,  fires,  accidents,  strikes,  etc.? 

An8tcer.  Such  items  may  be  spread  over  two  or  more  months  of  a  single 
calendar  year  without  specific  authority  from  the  Commission. 

If  Class  A  and  B  companies  desire  to  extend  into  the  succeeding  year  charges 
provided  for  in  section  24,  page  68,  of  the  Uniform  System  of  Accounts,  and  If 
Class  C  companies  desire  to  spread  similar  expense  over  succeeding  years,  spe- 
cial authorization  must  be  obtained. 

Case  118. 

Query.  What  should  be  the  accounting  for  additional  pay  allowed  employees 
for  loyal  service  and  overtime  work  during  a  strike? 

Answer.  Charge  the  accounts  to  which  the  regular  pay  of  the  employees  Is 
chargeable. 

Case  119. 

Query.  A  company  Is  required  by  a  city  ordinance  to  cut  and  replace  over- 
head wires  when  it  is  necessary  to  move  a  building  across  or  along  the  street 
To  what  account  shall  such  expense  be  charge<l? 

Answer.  Account  No.  602,  "Repairs  of  aerial  plant"  (Class  C,  account  No. 
COO). 

Case  120. 

Query.  What  should  be  the  accounting  for  the  expense  of  making  changes  at 
cable  terminals  on  account  of  changing  service  from  one-party  to  two-party 
lines,  or  vice  versa,  and  on  account  of  reassociation  of  party  lines? 

Answer.  Charge  account  No.  602,  "  Repairs  of  aerial  plant  "  (Class  C,  account 
No.  600)  or  account  No.  605,  "  Repairs  of  station  equipment "  (Class  C,  account 
No.  610)  according  to  the  class  of  wire  worked  upon. 

Case  121. 

Query.  A  franchise  granted  by  a  municipality  requires  that  the  company  shall, 
when  so  required  by  the  city  engineer,  change  its  pole  line  to  conform  to  curb 
and  grade  lines  established  by  the  city.  Should  the  cost  of  this  work  be  charged 
to  account  No.  673,  "  Telephone  franchise  requirements  "? 


%  I »  > 


$  f « 


35 

Answer.  No.  If  substitution  of  new  plant  for  existing  plant  is  not  involved, 
charge  account  No.  602,  "  Repairs  of  aerial  plant "  (Class  C,  No.  600),  unless  the 
expense  Is  relatively  large  and  provision  therefor  has  been  made  in  the  deprecia- 
tion reserve,  in  which  case  treat  as  "extraordinary  repairs"  (Class  C,  "recon- 
struction"). 

If  substitution  of  new  plant  for  existing  plant  is  involved,  the  substitution  not 
amounting  to  a  practical  replacement,  treat  as  "extraordinary  repairs"  (Class  C, 
"  reconstructloa  ").  Otherwise,  treat  through  the  plant  accounts,  I.  e.,  credit  the 
appropriate  plant  accounts  with  the  cost  of  the  property  retired  and  charge  the 
appropriate  plant  accounts  with  the  cost  of  the  new  property. 

Case  122. 

Query.  What  should  be  the  accounting  when.  In  connection  with  street  or  road- 
way improvements,  a  telephone  company  is  required  to  move  Its  pole  line  at  Its 
expense? 

Answer,  If  substitution  of  new  plant  for  existing  plant  is  not  involved,  charge 
account  No.  602,  "Repairs  of  aerial  plant"  (Class  C,  No.  600),  unless  the  expense 
is  relatively  large  and  provision  therefor  has  been  made  in  the  depreciation 
reserve,  In  which  case  treat  as  "  extraordinary  repairs  "  (Class  C,  "  reconstruc- 
tion"). 

If  substitution  of  new  plant  for  existing  plant  is  involved,  the  substitution  not 
amounting  to  a  practical  replacement,  treat  as  "extraordinary  repairs"  (Class 
C,  "reconstruction").  Otherwise,  treat  through  the  plant  accounts,  i.  e.,  credit 
the  appropriate  plant  accounts  with  the  cost  of  the  property  retired  and  charge 
the  appropriate  plant  accounts  with  the  cost  of  the  new  property. 

Case  123.  « 

Query.  To  what  account  should  be  charged  the  exi)ense  of  pole  butt  rein- 
forcements to  make  good  the  deterioration  of  the  pole? 

Answer.  Ordinarily,  this  work  should  be  classed  as  ordinary  repairs  and  the 
cost  thereof  charged  to  the  primary  repair  accounts.  However,  If  provision 
for  such  work  has  been  made  In  the  depreciation  reserve,  the  work  should  be 
treated  by  Class  A  and  B  companies  as  "  extraordinary  repairs,"  and  by  Class 
C  companies  as  "reconstruction." 

Case  124. 

Query.  What  should  be  the  accounting  for  the  following  Items  In  connection 
with  schools  conducted  by  the  company  for  the  instruction  of  plant  department 
employees? 

(1)  Equipment  Installed  and  used  in  such  schools. 

(2)  Maintenance  of  above  (if  done  independently  of  school  work). 

(3)  Salaries  of  men  during  attendance. 

(4)  Salaries  and  expenses  of  instructors,  materials  consumed  in  connection 
with  such  work,  rent,  and  house  service,  etc. 

Answer.  (1)  Charge  the  fixed  capital  (or  plant  and  equipment)  accounts  for 
the  classes  of  plant  involved. 

(2)  Charge  the  maintenance  accounts  for  the  classes  of  plant  involved. 

(3)  Consider  as  nonproductive  time  and  distribute  over  productive  time  of  the 
men  engaged  on  the  kinds  of  work  covered  by  the  school ;  e.  g.,  time  of  the  men 
studying  the  work  of  an  installer  should  be  distributed  over  productive  time  of 
the  installation  force. 

(4)  Apportion,  on  an  equitable  percentage  basis,  to  the  accounts  covering  the 
several  types  of  work  covered  by  the  school. 


36 


37 


Case  125. 

Query.  To  what  account  should  be  charge^  the  pay  and  expenses  of  students 
while  engaged  in  learning  the  work  of  switchmen  in  automatic  central  offices? 

Answer.  Account  No.  604,  "Repairs  of  central  office  equipment"  (Class  C. 
account  No.  610). 

Case  126. 

Query.  To  what  account  should  be  charged  the  expense  of  temporarily  dis- 
connecting subscribers'  lines  in  the  central  office  for  periods  of  nonuse  or  be- 
cause of  nonpayment  of  bills? 

Answer.  Account  No.  604,  "  Repairs  of  central  office  equipment "   (Class  C, 

account  No.  610). 

Case  127. 

Query.  To  what  account  should  be  charged  the  wages  of  switchmen  in  auto- 
matic central  offices? 

Answer.  Account  No.  604,  "  Repairs  of  central  office  equipment "  (Class  C, 
account  No.  610),  except  for  time  spent  in  operating  the  power  plant,  which 
should  be  charged  account  No.  628,  "  Transmission  power  "  (Class  C,  accound 

No.  660). 

Case  128. 

Query.  What  should  be  the  accounting  when  a  component  part  of  a  station 
(not  a  complete  station)  is  replaced;  e.  g.,  when  occasionally  a  desk  set  or  bell 
is  substituted  for  one  worn  out  or  requiring  repairs? 

Answer.  The  substitution  of  a  component  part  of  a  station  set  being  a  minor 
replacement  as  defined  in  section  21,  page  66,  of  the  Uniform  System  of  Ac- 
counts  (Class  C,  sec.  14,  p.  12)  the  cost  thereof  shall  be  charged  to  account 
No  605  "Repairs  of  station  equipment"  (Class  C,  account  No.  610).  The 
part  removed  shall  be  credited  to  account  No.  605  (Class  C,  No.  610)  at  salvage 

value. 

Case  129. 

Query.  To  what  account  should  be  charged  repairs  to  rented  buildings  made 
by  the  accounting  company? 

Answer.  Account  No.  606,  "Repairs  of  buildings  and  grounds"  (Class  C, 
account  No  640),  unless  the  rent  paid  for  the  building  Is  charge<l  to  one  of  the 
clearing  accounts  (Class  A  and  B  accounts  Nos.  701  to  706),  In  which  case  the 
repairs  should  be  charged  to  the  same  clearing  account 

Case  130. 

Query.  A  plant  employee  Is  sent  to  disconnect  a  subscriber's  station  because  of 
nonpayment  for  service.  To  what  account  should  the  expense  be  charged  if  the 
work  of  disconnecting  Is  abandoned  because  of  the  payment  of  the  bill? 

Answer.  Account  No.  607,  "  Station  removals  and  changes  "  (Class  C.  account 

No.  620). 

Case  131. 

Query.  Should  the  text  of  account  No.  610,  "  Other  maintenance  expenses  " 
(Class  C,  account  No.  640)  be  Interpreted  as  excluding  expenses  Incurred  by 
the  plant  department  which  are  not  in  the  nature  of  "  repairs "  to  telephone 
plant  and  equipment? 


Answer.  No.  Miscellaneous  Items  of  maintenance  and  operating  expense  In- 
curred by  the  plant  department  which  are  not  chargeable  to  maintenance  ac- 
counts Nos.  601  to  609,  Inclusive,  and  clearing  accounts  Nos.  701  to  707,  Inclusive 
(Class  C,  accounts  Nos.  600,  610,  and  620),  may  be  charged  to  account  No. 
610  (Class  C,  account  No.  640).     {See  Case  111.) 

Case  132. 

Query.  When  material  fit  to  use  again  has  been  taken  out  of  plant  and 
charged  to  the  materials  and  supplies  accounts  at  the  original  cost,  estimated 
if  not  known,  or  at  the  price  of  corresponding  new  material,  what  should  be 
the  accounting  for  repairing  (not  converting)  such  material? 

Answer.  Charge  the  expense  of  repairs  made  thereon  to  the  repair  accounts 
which  would  have  been  charged  had  the  repairs  been  made  while  the  material 
was  In  actual  service.  Only  Items  Involving  expense  due  to  causes  defined  as 
depreciation  and  so  large  as  to  distort  the  ordinary  repair  accounts  shall  be 
treated  as  "extraordinary  repairs"  by  Class  A  and  B  companies  (sec.  21,  p. 
66,  of  the  Uniform  System  of  Accounts)  and  as  "reconstruction"  by  Class 
C  companies  (see  sec.  12,  p.  11,  of  the  Uniform  System  of  Accounts). 

* 

Case  133. 

Query.  What  should  be  the  accounting  for  the  expense  of  repairs  to  used 
office  furniture  and  fixtures  carried  In  the  materials  and  supplies  accounts? 

Answer.  (1)  If  the  used  furniture  and  fixtures  had  been  charged  to  the  ma- 
terials and  supplies  account  at  salvage  value,  the  cost  of  the  repairs  shall  be 
charged  to  account  No.  122,  "Materials  and  supplies"   (Class  C,  account  J^o. 

135). 

(2)  If  the  used  furniture  and  fixtures  had  been  charged  to  materials  and 
supplies  account  at  the  original  cost,  or  at  the  price  of  corresponding  new 
material,  the  cost  of  repairs  shall  be  charged  to  the  expense  accounts  which 
would  have  been  charged  had  the  repairs  l)een  made  while  the  furniture  and 
fixtures  were  In  actual  service,  except  in  cases  where  provision  has  been  made 
for  such  expense  In  the  depreciation  reserve,  Class  A  and  B  companies  shall 
treat  the  matter  as  "  extraordinary  repairs  "  and  Class  C  companies  as  "  recon- 
struction "  (see  sec.  21,  p.  66,  of  the  Uniform  System  of  Accounts  for  Class  A 
and  B  companies  and  sec  12,  p.  11,  for  Class  C  companies).     (See  Case  52.) 

Case  134. 

Query.  What  should  be  the  accounting  for  the  cost  of  repairs  to  connect- 
ing companies'  and  to  farmers'  lines  when  the  work  Is  done  and  the  expense  Is 
borne  by  the  accounting  company? 

Answer.  Charge  the  appropriate  repair  accounts  of  the  accounting  company 
according  to  the  class  of  plant  worked  upon. 

Case  135. 

Query.  To  what  account  should  be  charged  the  expense  of  moving  an  em- 
ployee from  one  location  to  another  when  transferred  by  the  telephone  com- 
pany and  the  expense  Is  assumed  by  It? 

Answer.  Charge  the  account  to  which  traveling  expenses  of  the  employee  In 
the  new  location  would  be  charged. 


38 


39 


Case  136. 

Query.  To  what  account  should  be  charged  the  cost  of  figuring  rates  and 
the  expense  of  issuing  tariff  and  route  books? 

Answer.  The  expense  of  figiuring  the  rates  and  preparing  the  data  shall  be 
apportioned  between  account  No.  621,  "Traffic  superintendence,"  and  account 
No.  640,  "  Commercial  administration,"  according  to  work  performed  (Class  C, 
charge  account  No.  670). 

The  expense  of  printing  and  distributing  shall  be  apportioned  between  ac- 
count No.  629,  "Central  office  stationery  and  printing,"  and  account  No.  640, 
"Commercial  administration,"  on  an  equitable  basis  (Class  C,  accounts  Nos. 
660  and  680). 

Case  137. 

Query.  To  what  account  should  be  charged  the  expenses  Incurred  by  the 
traffic  Inspectors  In  making  test  calls,  adjusting  service  complaints,  inspecting 
subscribers'  private  branch  exchanges  and  instructing  subscribers'  private 
branch  exchange  operators? 

Answer.  Account  No.  622,  "Service  Inspection"  (Class  C,  account  No.  660). 
Cash  refunded  to  patrons  and  amounts  deposited  In  making  test  calls  by  In- 
spectors and  other  employees  of  the  company  should  not  be  charged  to  this 
account  but  should  be  charged  to  the  revenue  accounts. 

Case  138. 

Query.  To  what  account  should  be  charged  the  expense  Incurred  by  the 
traffic  department  in  reading  meters  Installed  on  measured  service  lines? 

Answer.  Account  No.  623,  "  Clerical  operating  wages "  (Class  C,  account 
No.  660). 

Case  139. 

Query.  What  should  be  the  accounting  for  the  pay  of  operators  furnished 
lessees  of  private  branch  exchanges  and  for  the  amounts  rei'elved  for  such 
services? 

Answer.  Charge  the  pay  of  the  operators  to  account  No.  624,  "Operators' 
wages"  (Class  C,  account  No.  650). 

If  the  operators  are  regularly  employed  by  the  telephone  company,  credit  the 
payments  from  subscribers  for  the  services  of  the  operators  to  account  No. 
525,  "Other  miscellaneous  revenues"  (Class  C,  account  No.  520).  If  the 
operators  are  not  regularly  employed  by  the  telephone  company,  credit  the 
reimbursement  to  account  No.  624,  "  Operators'  wages "  (Class  C,  account 
No.  650). 

Case  140. 

Query.  To  what  account  should  be  charged  the  pay  and  expenses  of  wire 
chiefs  when  working  on  Morse  leased  lines  in  central  offices? 

Answer.  Charge  the  accounts  otherwise  charged  with  the  pay  and  expenses 
of  wire  chiefs  unless  considerable  time  Is  involved.  In  which  case  charge  account 
No.  624,  "Operators'  wages"  (Class  C,  account  No.  650). 


>  L 


Case  141. 

Query.  When  a  telephone  company  oi)erates  a  private-branch  exchange  for 
company  (official)  business,  should  any  transfer  be  made  from  traffic  expenses 
to  the  expense  accounts  of  the  departments  served? 

Answer.  No.  The  cost  of  operating  such  private  branch  exchanges  shall 
be  charged  to  the  various  accounts  under  traffic  expenses. 

Case  142. 

Query.  Should  any  portion  of  supply  expense  and  plant  supervision  expense 
be  applied  on  plant  department  charges  to  Class  A  and  B,  account  No.  628, 
"Transmission  power,"  and  account  No.  673,  "Telephone  franchise  require- 
ments?" 

Anstoer.  Yes.  The  appropriate  portion  of  such  expenses  may  be  charged  to 
account  No.  628  and  account  No.  673  In  the  usual  manner. 

Case  143. 

Query.  To  what  account  should  be  charged  amounts  refunded  to  connecting 
companies  for  postage  on  toll  tickets  and  reports  forwarded? 

Answer.  Account  No.  629,  "Central  office  stationery  and  printing"  (Class 
C,  account  No.  660). 

Case  114. 

Query.  To  what  account  should  be  charged  the  cost  (i.  e.,  postage  and  other 
transportation  charges)  of  forwarding  toll  tickets: 

(1)  From  central  offices  to  revenue  accounting  offices.  • 

(2)  From  revenue  accounting  offices  to  local  collection  offices. 

Answer.  (1)  Account   No.   (529,    "Central   office    stationery    and   printing" 
(Class  C,  No.  660). 
(2)  Account  No.  646,  "Revenue  accounting"  (Class  C,  No.  680). 

Case  145. 

Query.  To  what  account  should  be  charged  the  cost  of  covers,  chains,  and 
locks  used  in  connection  with  directories  at  pay  stations? 
Answer.  Account  No.  632,  "  Pay  station  expenses  "  (Class  C,  account  No.  660). 

Case  140. 

Query.  What  Is  the  general  distinction  between  items  of  expense  account  of 
pay  stations  which  are  chargeable  to  account  No.  632,  "  Pay  station  exx)enses  " 
(Class  C,  account  No.  660),  and  those  which  are  chargeable  to  account  No. 
048,  "Pay  station  commissions"  (Class  C,  account  No.  680)? 

Answer.  Account  No.  (532,  "Pay  station  expenses"  (Class  C,  No.  660),  shall 
be  charged  only  with  the  costs  of  speeiflc  items  of  traffic  exx)ense,  such  as  are 
classable  under  that  account.  Items  chargeable  to  this  account  usually  occur 
in  connection  with  pay  stations  which  are  attende<l  by  a  company  employee  or 
by  a  Joint  employee,  and  should  be  stated  as  flat  sums  rather  than  as  per- 
centages on  receipts. 

Account  No.  648,  "Pay  station  commissions"  (Class  C,  No.  680)  shall  be 
charged  with  all  percentages  of  receipts,  or  flat  amounts  deducted  from  receipts, 
or  other  speclfie<l  sums,  which  are  paid  either  to  the  agent  In  charge  (usually 
not  a  salaried  employee  of  the  company)  or  to  the  person,  individual,  corpora- 
tion, or  other,  upon  whose  premises  the  public  pay  station  is  located,  as  general 


40 

compensation  for  all  that  is  furnished  with  respect  to  this  station,  i.  e.,  space, 
light,  heat,  attendance,  incidental  advertising,  etc. 

When  the  classificaion  is  doubtful,  the  expense  shall  be  charged  to  account 
No.  648,  "  Pay  station  commissions"  (Class  C,  No.  680). 

Case  147. 

Query.  What  should  be  the  accounting  for  the  cost  oif  stationery  and  printing 
used  by  the  commercial  department? 

Ansicer.  This  expense  should  be  apportioned  on  the  basis  of  use  to  the  several 
accounts  under  "Commercial  exi)enses'*  (Class  C,  account  No.  680). 

Case  148. 

Query.  When  a  telephone  company,  instead  of  providing  its  own  switchboard 
and  switchboard  operator,  terminates  its  toll  lines  in  the  switchboard  of  an- 
other telephone  company  and  arranges  to  have  the  latter  do  the  necessary 
operating,  what  should  be  the  accounting  if  the  charges  for  such  services  are 
on  a  flat  sum  basis  (not  on  a  division  of  revenue)  ? 

Ansicer.  The  company  receiving  the  service  shall  charge  account  No.  633, 
"  Other  traffic  exi)enses  *'  (Class  C,  account   No.  660). 

If  services  are  billed  at  cost,  the  company  performing  the  service  shall  credit 
the  appropriate  operating  or  other  accounts  previously  charged;  If  not  billed 
at  cost.  It  should  credit  account  No,  525,  "Other  miscellaneous  revenue"  (Class 
C,  account  No.  520). 

Case  149. 

Query.  To  what  account  should  be  charged  (1)  miscellaneous  contributions, 
and  (2)  related  expense,  such  as  decorating  buildings  or  furnishing  floats  on 
holiday  occasions? 

Ansicer.  (1)  If  contributions  are  made  for  the  purpose  of  developing  traffic, 
for  example,  expenses  Incurred  In  connection  with  an  Industrial  exposition 
or  other  business  occasion,  charge  account  No.  642,  "  Advertising "  (Class  C, 
account  No.  680).  If  contributions  are  made  without  regard  to  traffic  but 
incidentally  for  the  benefit  of  the  operations  of  the  company,  such  as  those 
to  local  fire  departments,  business  leagues,  Y.  M.  C.  A.,  and  similar  Institutions 
charge  the  appropriate  expense  account  of  the  department  concerned ;  or.  If 
Impossible  of  allocation,  charge  account  No.  675,  "Other  general  expenses" 
(Class  C,  account  No.  680). 

(2)  Exi)endltures  such  as  those  for  decorating  buildings  and  furnishing 
floats  on  holiday  occasions,  except  when  Incurred  for  traffic  purposes  and,  there- 
fore, chargeable  to  account  No.  642,  "Advertising"  (CJlass  C,  account  No.  680) 
should  be  departmentalized  as  far  as  possible.  Items  so  general  In  character 
as  not  to  admit  of  departmentalization  should  be  charged  to  account  No.  675, 
"Other  general  exi)enses  "  (Class  C,  account  No.  680).    (See  Case  111.) 

Case  150. 


Query.  To  what  account  should  be  charged  the  salaries  and  expenses  of  audi- 
tors of  receipts  and  their  clerks  and  division  auditors  of  receipts  and  their 
clerks? 

Answer.  Account  No.  646,  "Revenue  accounting"  (Class  C,  account  No.  670). 


41 


Case  151. 


Query.  To  what  account  should  be  charged  the  cost  of  postage  used  In  mail- 
ing bills  to  subscribers? 
Answer.  Account  No.  647,  "Revenue  collecting"  (Class  C,  account  No.  680). 


Case  152. 

Query.  To  what  account  should  be  charged  the  cost  of  special  editions  of 
tUrectorles,  or  parts  of  directories,  for  use  by  the  traffic  department? 

Answer.  Account  No.  649,  "  Directory  expenses  "  (Class  C,  account  No.  680) 
or  treat  through  account  No.  132,  "Prepaid  directory  expense"  (Class  C, 
account  No.  145). 

Case  153. 

Query.  To  what  account  should  be  credited  amounts  received  from  the  sale  of 
new  directories  or  as  salvage  on  old  directories? 

Answer.  Credit  receipts  from  sales  of  directories  to  account  No.  523,  "Adver- 
tising and  directory  "  (Class  C,  account  No.  520),  and  from  salvage  to  account 
No.  649,  "  Directory  expenses  "  (Class  C,  account  No.  680). 

Case  154. 

Query.  To  what  account  should  be  charged  losses  Incurred  by  reason  of  short- 
age In  a  local  manager's  account  In  excess  of  the  amount  paid  on  his  bond  by  the 
surety  company? 

Answer.  Account  No.  640,  " Ck)umierclal  administration"  (Class  C,  account 
No.  680). 

Case  155. 

Query.  To  what  account  should  be  charged  the  pay  of  a  general  manager  or 
superintendent  having  supervision  of  the  entire  operations  of  the  company? 

Answer.  Account  No.  661,  "  Salaries  of  general  officers "  (Class  C,  account 
No.  670). 

Case  156. 

Query.  What  account  should  be  charged  with  the  expense  of  a  board  of  arbi- 
trators on  subscribers'  rat»?s? 

Answer.  Account  No.  650,  "  Other  commercial  expenses  "  (Class  C,  account 
No.  680). 

Case  157. 

Query.  To  what  account  shall  be  charged  the  expense  of  compiling  data  and 
making  reports  to  the  Federal  Government,  public-service  commissions,  tax  au- 
thorities, and  others,  and  of  testifying  before  such  bodies? 

Answer.  The  expense  shall  be  charged  to  the  accounts  otherwise  charged  with 
the  pay  and  expenses  of  the  employees  who  prepare  the  reports  or  testify  before 
such  botlles.  For  example,  If  the  reports  are  prepared  by  the  general  office 
clerks,  the  expense  of  preparing  should  be  charged  to  account  No.  662,  "  Salaries 
of  general  office  clerks  "  (Class  C,  account  No.  670)  ;  If  the  data  regarding  plant 
are  prepared  by  the  plant  forces,  the  expense  should  be  charged  to  account  No. 
601,  "  Supervision  of  maintenance,"  or  account  No.  706,  "  Plant  supervision  ex- 
pense" (Class  C,  account  No.  640)  ;  If  the  passing  of  tax  claims,  filing  tax 
reports,  and  making  returns  to  tax  assessors  are  handled  by  the  legal  depart- 
ment, the  expense  should  be  charged  to  account  No.  667,  "  General  law  expenses  " 
(Class  C,  account  No.  670). 


I'  ^ 


42  • 

Case  158. 

Query.  To  what  account  should  be  charged  allowances  and  expenses  of  receiv- 
ers operating  a  telephone  company  under  orders  of  the  court? 

Answer.  Account  No.  661,  "Salaries  of  general  officers"  (Class  C,  No.  670), 
and  account  No.  663,  "General  office  supplies  and  expenses"  (Class  C,  account 
No.  680),  except  that  expenses  incurred  for  legal  services  shall  be  charged  to 
account  No.  667,  "  General  law  expenses  "  (Class  C,  account  No.  680). 

Case  159. 

Query.  Is  any  accounting  distinction  to  be  made  between  monthly  or  other 
l)eriodic  payments  to  attorneys  regularly  retained  by  the  company  and  those 
retained  for  specific  services? 

Answer.  No.  Both  the  periodic  payments  to  attorneys  regularly  retained 
by  the  company  and  the  payments  to  and  expenses  of  attorneys  retained  for 
specific  services  shall  be  charged  to  account  No.  667,  "General  law  expenses," 
or  account  No.  670,  "  Law  expenses  connected  with  damages,"  as  may  b« 
appropriate  (Class  C,  account  No.  680). 

Case  160. 

Query.  A  company  elects  to  protect  itself  against  all  losses  ordinarily 
covered  by  premium  insurance,  by  setting  up  a  reserve  for  that  purpose,  but, 
in  order  to  obtain  additional  protection,  a  part  or  all  of  the  risk  is  placed 
with  an  insurance  company.  What  should  be  the  accounting  for  the  premiums 
paid  to  and  the  recoveries  received  from  the  insurance  company? 

Answer.  The  amounts  set  aside  as  an  insurance  reserve  shall  be  charged 
to  account  No.  668,  "Insurance"  (Class  C,  account  No.  680),  and  credited  to 
account  No.  169,  "  Insurance  and  casualty  reserves "  (Class  C,  account  No. 
390).  Premiums  paid  insurance  companies  for  such  reinsurance  shall  be 
charged  to  account  No.  169  (Class  C,  account  No.  190)  and  recoveries  from  such 
companies  shall  be  credited  to  account  No.  169  (Class  C,  account  No.  190). 

Case  161. 

Query.  What  should  be  the  accounting  for  insurance  premiums  on  materiahi 
and  supplies  carried  in  stock? 

Answer.  Charge  account  No.  668,  "Insurance"  (Class  C,  account  No.  680), 
with  the  premiums  paid  and  periodically  transfer  the  portion  applicable  to 
construction  to  the  appropriate  fixed  capital  (plant  and  equipment)  accounts 
or  charge  to  account  No.  274,  "  Miscellaneous  construction  expenditures  "  (Class 
C,  account  No.  270). 

Cass  162. 

Query.  To  what  account  should  be  charged  the  cost  of  insuring  of  the  con- 
tinuity or  regularity  of  revenues  or  earnings,  i.  e.,  "  nse-and-occupancy  insur- 
ance"? 

Answer.  Account  No.  668,  "Insurance"  (Class  C,  account  No.  680). 


43 

Case  163. 

Query.  To  what  account  should  be  charged  the  premium  paid  on  a  judicial 
bond  necessary  in  connection  with  the  appeal  of  a  personal-injury  or  damage 
case? 

Answer.  Account  No.  670,  "Law  expenses  connected  with  damages"  (Class 
C,  account  No.  680). 

Case  164. 

Query.  To  what  account  should  be  charged  the  premiums  on  bonds  given 
as  follows: 

(1)  To  municipalities  under  the  general  terms  of  a  franchise  or  ordinance 
and  not  in  connection  with  specific  construction  or  maintenance  work. 

(2)  To  municipalities  or  property  owners  in  connection  with  specific  pieces 
of  construction  or  maintenance  work. 

Answer.  (1)  Account  No.  673,  "Telephone  franchise  requirements"  (Class 
C,  account  No.  680). 

(2)  The  appropriate  construction  or  maintenance  accounts  according  to  the 
nature  of  the  work. 

Case  165. 

Query.  To  what  account  should  be  charged  the  expense  of  publishing  a  com- 
pany newspaper  or  other  journal? 

Ansicer.  Account  No.  675,  "Other  general  expenses"  (Class  C,  account  No. 
680),  unless  published  in  the  interest  of  a  specific  department,  in  which  case 
charge  the  operating  exi)ense  account  pertaining  to  that  department.  Receipts 
from  subscriptions  and  from  the  sale  of  advertising  space  in  such  journals 
shall  be  credited  account  No.  675  (Class  C,  No.  680)  or  the  other  account  to 
which  the  cost  of  publishing  was  charged. 

Case  166. 

Query.  May  the  cost  of  patents  be  charged  by  Class  A  and  B  companies  direct 
to  account  No.  674,  "Amortization  of  franchises  and  patents,"  instead  of  to 
account  No.  203,  "Patent  rights,"  and  amortized  through  charges  to  account 
No.  674? 

Answer.  Charges  to  account  No.  674,  "Amortization  of  franchises  and 
patents,"  on  account  of  patents  should  be  restricted  to  amounts  necessary  to 
cover  such  portion  of  the  life  of  patents  charged  to  account  No.  203,  "  Patent 
rights,"  as  it  Is  estimated  has  expired  or  been  consumed. 

The  character  of  a  patent  purchased  should  determine  whether  or  not  the 
cost,  or  any  portion  thereof,  should  be  charged  to  account  No.  203,  "Patent 
rights."  Any  amounts  paid  for  patents  having  an  estimated  service  life  of  less 
than  one  year,  patents  of  doubtful  service  value,  patents  In  ar  undeveloped 
state,  patents  acquired  at  small  cost,  and  similar  expenditures  on  account  of 
patents  may  be  charged  direct  to  account  No.  675,  "  Other  general  expenses." 

Case  167. 

Query.  To  what  account  should  be  charged  the  cost  of  a  general  audit  of 
ft  company's  books  by  an  audit  company? 
Answer.  Account  No.  675,  "Other  general  expenses"  (Class  C,  account  No. 

aso). 


u 


45 


Case  368. 

Query.  To  what  acconnt  should  be  charged  the  cost  of  piintlng  franks  for 
the  use  of  officers  and  employees  of  the  company? 

Answer.  Account  No.  675,  "  Other  general  expenses "  (Glass  C,  account  No. 
680). 

Gabs  160. 

Query.  A  pay  check  fell  Into  the  hands  of  an  unauthorized  party,  who  secured 
payment  by  use  of  a  forged  signature.  The  company  was  unable  to  effect  col- 
lection from  the  bank  paying  the  check,  or  from  the  person  forging  the  same. 
To  what  account  should  the  loss  be  charged? 

Answer.  Account  No.  675,  "  Other  general  expenses  "  (Glass  G,  account  No. 
680). 

Gase  170. 

Query.  An  agent  of  the  company  received  a  summons  garnlsheelng  the  wages 
of  an  employee.  On  account  of  delay  incident  to  notifying  the  legal  depart- 
ment, the  employee  succeeded  in  drawing  his  pay  and  the  company  was  obliged 
to  make  good  the  amount  of  the  claim.  To  what  account  should  the  loss  be 
charged? 

Answer.  Charge  the  appropriate  account  of  the  department  responsible  for 
the  delay. 

Case  171. 

Query.  To  what  account  should  be  charged  the  cost  of  first-aid  kits  and 
renewals  of  same? 

Answer.  When  such  expense  is  incurred  primarily  for  the  plant  department, 
charge  account  No.  706,  "Plant  supervision  expense";  otherwise,  charge  the 
appropriate  expense  accounts  of  the  departments  in  whose  interests  the  costs 
are  incurred. 

Gase  172. 

Query.  To  what  account  should  be  charged  the  cost  of  Inventories  and  ap- 
praisals of  plant? 

Answer.  Inventories  and  appraisals  should  be  treated  in  the  accounts  as 
follows : 

(1)  Those  taken  incident  to  the  ascertainment  of  a  general  valuation  of  the 
property  owned  or  used  by  the  company,  including  those  taken  in  accordance 
with  the  Act  to  regulate  commerce,  or  with  other  similar  Federal  or  State 
requirements ;  charge  to  account  No.  675,  "  Other  general  expenses,"  preferably 
in  a  subaccount  entitled  "Valuation  expenses"  (Class  C,.  account  No.  680). 
This  ruling  does  not  modify  the  provisions  relating  to  betterments  contained  in 
section  9,  page  32,  of  the  Uniform  System  of  Accounts  for  Class  A  and  Class  B 
Companies. 

(2)  Those  taken  on  the  orders  of  public  authorities  for  other  purposes  such 
as  for  use  in  rate  cases,  or  for  the  purpose  of  adjusting  rate  schedules ;  charge 
the  cost  to  account  No.  675,  "Other  general  expenses"  (Class  C,  account 
No.  680). 

(3)  Those  taken  in  connection  with  the  projected  purchase  of  property; 
charge  account  No.  136,  "Other  suspense"  (Class  C,  account  No.  150),  pending 
their  final  disposition.  If  the  property  is  finally  purchased,  the  cost  should  be 
considered  as  part  of  the  price  paid  and  charged  to  the  appropriate  asset 
account.  If  the  property  is  not  purchased,  the  cost  shall  be  charged  to  account 
No.  417,  "  Other  deductions  from  surplus  "  (CHass  C,  account  No.  195). 


'  * 


(4)  Those  taken  In  connection  with  the  projected  sale  or  lease  of  property 
to  others;  charge  account  No.  136  (Class  C,  No.  150),  pending  their  final  dis- 
position. If  the  property  is  finally  leased,  charge  the  account  appropriate  for 
rent  If  the  property  is  sold  and  the  selling  price  includes  the  cost  of  appraisal, 
such  cost  shall  be  considered  a  part  of  the  sale  price.  If  the  project  is  finally 
abandoned,  or  if  the  property  is  sold,  but  the  selling  cost  does  not  include  the 
cost  of  appraisal,  the  cost  of  appraisal  shall  be  charged  to  account  No.  417 
(Class  C,  No.  195). 

No  amounts  shall  be  included  in  the  cost  of  inventories  and  appraisals 
for  incidental  services  of  officers  and  employees;  but  special  office,  clerical, 
traveling,  and  incidental  expenses  incurred  by  such  officers  and  employees  may 

be  included. 

Case  173. 

Query.  What  should  be  the  accounting  for  expenses  Incurred  by  the  plant 
department  In  Inspecting  for  and  In  checking  the  attachments  of  other  com- 
panies to  the  pole  lines  of  the  accounting  company? 

Answer.  Charge  account  No.  610,  "Other  maintenance  expenses"  (Class  G, 
account  No.  640),  or  If  performed  Incident  to  other  work,  charge  the  accounts 
otherwise  charged  with  the  pay  and  expenses  of  the  employees  who  perform  the 

services. 

Gase  174. 

Query.  To  what  account  should  be  charged  expenses  on  account  of  associa- 
tions maintained  by  and  In  behalf  of  telephone  companies? 

Answer.  The  salaries  and  expenses  of  the  officers  representing  the  company 
as  members  of  the  associations  shall  be  charged  to  the  accounts  to  which  the 
salaries  and  expenses  of  such  officers  are  chargeable  in  connection  with  the 
operation  of  the  telephone  plant.  Amounts  paid  Incident  to  the  maintenance 
of  such  associations  shall  be  charged  to  account  No.  675,  "Other  general 
expenses"  (Class  C,  account  No.  680). 

Case  175. 

Query.  What  should  be  the  accounting  for  the  expense  of  overhauling  and 
repairing  of  motor  trucks  and  like  equipment? 

Answer.  The  customary  annual  overhauling  of  such  apparatus  shall  be 
charged  to  account  No.  702,  "  Stable  and  garage  expense,"  and  cleared  as  pro- 
vided in  the  text  of  that  account.  Work  of  less  frequent  occurrence  or  in- 
volving such  reconstruction  items  as  replacing  the  engine  may  be  handled  as 
"extraordinary  repairs,"  if  the  reserve  has  been  provided  for  such  expenses. 
Glass  C  companies  shall  charge  this  expense  to  account  No.  640,  "  Other  main- 
tenance expenses." 

Case  176. 

Query.  To  what  account  should  be  charged  rent  of  land  used  for  storage  of 
material  for  use  in  construction  and  maintenance  work? 

Answer.  Account  No.  704,  "  Supply  expense,"  and  cleared  as  provided  in  the 
text  of  that  account  Class  C  companies  shall  distribute  on  an  equitable  basis 
between  account  No.  640,  "Other  maintenance  expenses,"  and  account  No. 
270,  "  Undistributed  construction  expenditures." 


INDEX  BY  ACCOUNTS. 
Class  A  and  B  Companies. 


H 


Balance  Sheet. 

Case. 

_  102.  Reserve  for  accrued  depreciation — Cr 4 

^  ■  •  f  105.  Investment  securities 7, 13 

110.  Advances  to  system  corporations  for  construction,  equipment,  and  bet- 
terments   7 

111.  Miscellaneous  investments 8, 10, 11, 12 

113.  Cash 14, 78 

114.  Special  depoeite 14,15,16,22 

116.  Marketable  securities 13 

117.  Bills  receivable 7 

118.  Due  from  subscribers  and  agents 96, 97 

120.  Miscellaneous  accounts  receivable 20 

122.  Materials  and  supplies 17, 18, 133 

125.  Sinking  fund  assets 19. 78 

132.  Prepaid  directory  expense 152 

^  133.  Other  prepayments 34 

135.  Unamortized  debt  discount  and  expense 67, 69, 73 

136.  Other  suspense 7,21,22,94,172 

153.  Funded  debt 23 

169.  Insurance  and  casualty  reserves 160 

170.  Liability  on  account  of  provident  funds 24 

170a.  Other  deferred  credit  items 8, 21 

171 .  Surplus  invested  since  December  31,  1912,  in  fixed  capital 26 

172.  Surplus  invested  in  sinking  funds 78 

Fixed  Capftal. 

201.  Organization 41, 73 

202.  Franchises 42 

203.  Patent  rights 166 

f  207.  Right  of  way 9^ 

^  211.  Land H.^^^ 

212.  Buildings 45,46 

220.  Central  office  equipment 47 

221.  Central  office  telephone  equipment 48, 49,  50,  51 

222.  Other  equipment  of  central  offices 52 

230.  Station  equipment 47 

234.  Private  branch  exchanges 55 

235.  Booths  and  special  fittings 52 

241.  Exchange  pole  lines 61 

245.  Exchange  underground  cable 59 

251 .  Toll  pole  lines 35, 61 

265.  Toll  underground  cable 59 

(47) 


48 


Cam. 

260.  General  equipment 25, 62 

261.  Office  furniture  and  fixtures 25,  52,  53, 62, 63 

262.  General  shop  equipment 25,  52, 62 

263.  General  store  equipment. 25,  52, 62 

264.  General  stable  and  garage  equipment 25,  52, 62 

265.  General  tools  and  implements 25, 62 

268.  Interest  during  construction 64 

273.  Taxes  during  construction 71 

274.  Miscellaneous  construction  expenditiu^s 38, 65, 66, 161 

Income  Statement. 

303.  Other  operating  expenses 8 

304.  Uncollectible  operating  revenues 96,  97 

305.  Taxes  assignable  to  operations 71, 72, 73, 74 

310.  Rent  revenues  from  lease  of  telephone  plant 81 

311.  Miscellaneous  rent  revenues 12,  75, 80 

312.  Dividend  revenues 76 

313.  Interest  revenues 64, 76 

314.  Sinking  and  other  reserve  fund  accretions 77, 78 

316.  Miscellaneous  nonoperating  revenues 20 

320.  Rent  expense 8, 12, 80 

323.  Uncollectible  nonoperative  revenues 79 

330.  Rent  deductions  for  lease  of  telephone  plant 81 

332.  Rent  deductions  for  conduits,  poles,  and  other  supports 60,  84 

334.  Miscellaneous  rent  deductions 83, 85 

335.  Interest  deductions  for  funded  debt 78 

336.  Other  interest  deductions 18, 87, 88, 89 

338.  Amortization  of  debt  discount  and  expense 67, 69 

350.  Appropriations  of  income  to  sinking  and  other  reserve  funds ,       78 

Corporate  Surplus  or  Deficit. 

401.  Miscellaneous  additions  to  surplus 13, 21, 33,  36, 90, 91, 92, 93, 108 

415.  Appropriations  of  surplus  for  construction,  equipment,  and  betterments. .        36 
417.  Other  deductions  from  surplus 13, 21, 90, 91, 93, 172 

Operatino  Revenues. 

500.  Subscribers'  station  revenues 95, 104 

501.  Public  pay  station  revenues 104 

503.  Service  stations 104 

505.  Minor  rents  of  exchange  plant 80, 106 

510.  Message  tolls 99 

515.  Minor  rents  of  toll  plant 80, 106 

520.  Messenger  service 105 

523.  Advertising  and  directory 102, 153 

524.  Rents  from  other  operating  property 80, 106 

525.  Other  miscellaneous  revenue 107, 109, 139, 148 


526.  Licensee  revenue — Cr. 


75 


Operating  Expenses. 


601.  Supervision  of  maintenance 114, 131, 157 

602.  Repairs  of  aerial  plant 61, 82, 119, 120, 121, 122, 131 

603.  Repairs  of  underground  plant 66, 131 


49 


Case. 

604.  Repairs  of  central  office  equipment 52, 125, 126, 127, 131 

605.  Repairs  of  station  equipment 52, 120, 128, 131 

4  606.  Repairs  of  buildings  and  grounds 129, 131 

607.  Station  removals  and  changes 32, 79, 130, 131 

608.  Depreciation  of  plant  and  equipment 131 

609.  Extraordinary  depreciation 131 

610.  Other  maintenance  expenses 34, 131, 173 

621.  Traffic  superintendence , 52, 136 

622.  Service  in8j)ection 137 

623.  Clerical  operating  wages 138 

624.  Operators'  wages 139, 140 

626.  Rest  and  lunch  rooms 52 

y  627.  Operators'  schooling 52 

628.  Transmission  power 127, 142 

629.  Central  office  stationery  and  printing 136, 143, 144 

630.  Messenger  service 105 

631.  Miscellaneous  central  office  expenses 52 

632.  Pay  station  expenses 52, 145, 146 

633.  Other  traffic  expenses 52, 148 

640.  Commercial  administration 52, 136, 154 

642.  Advertising 44,52,149 

643.  Canvassing 52 

646.  Revenue  accounting 52, 63, 144, 150 

647.  Revenue  collecting 52, 151 

648.  Pay  station  commissions 104, 146 

649.  Directory  expenses 52, 152, 153 

"w  650.  Other  commercial  expenses 52, 156 

661.  Salaries  of  general  officers 155, 158 

662.  Salaries  of  general  office  clerks 157 

663.  General  office  supplies  and  expenses 158 

666.  Other  general  office  supplies  and  expenses 52 

667.  General  law  expenses 69, 157, 158, 159 

668.  Insurance 66, 160, 161, 162 

669.  Accidents  and  damages 101, 102 

670.  Law  expenses  connected  with  damages 159, 163 

673.  Telephone  franchise  requirements 42, 103, 121, 142, 164 

674.  Amortization  of  franchises  and  patents 166 

675.  Other  general  expenses 94, 149, 165, 166, 167, 168, 169, 172, 174 

676.  Telephone  franchise  requirements — Cr 103 

^  Clearing  Accounts. 

701.  Shop  expense 1,25,46,52,129,131 

702.  Stable  and  garage  expense 1, 25, 46, 52, 129, 131, 175 

703.  Tool  expense 1,129,131 

704.  Supply  expense 1,18,25,46,52,129,131,142,176 

705.  Engineering  expense 1»  129, 131 

706.  Plant  supervision  expense 1, 52, 68, 129, 131, 142, 157, 171 

707.  House  service  expense 1>  53, 131 

General  Instructions. 

1.  Telephone  companies  divided  into  two  claases 1, 4 

3.  Balance-sheet  accounts 1 

5.  Reacquired  securities 3, 5, 6 


50 


Case. 

6.  Discount  and  premium  on  capital  stock 93 

7.  Discount,  expense,  and  premium  on  funded  debt 93 

9.  Fixed  capital  defined 25,172 

10.  Costs  to  be  actual  money  costs 30 

11.  Interest  accruing  during  construction  period 64 

13.  Plant  and  equipment  and  other  property  purchased 26, 27, 28, 29, 30 

14.  Fixed  capital  withdrawn  or  retired 31, 32, 37 

16.  Taxes , 70 

19.  Deductions  from  revenues 101 

21.  Repairs  defined 121, 122, 123, 128, 132, 133 

24.  Extraordinarj'^  casualties  and  unanticipated  reconstruction 117 


INDEX  BY  ACCOUNTS. 
Class  C  Companies. 


105. 
110. 
115. 
120. 
125. 
130. 
135. 
140. 
145. 
150. 
160. 
165. 
185. 
190. 
195. 


200. 
210. 
220. 
230. 
240. 
250. 
260. 
270. 


320. 
340. 
350. 
360. 
370, 


500, 
510 
520 
b30 


Balance  Sheet. 

Other  property 8, 10, 11, 12 

Securities Q,7,n 

Cash 22,78 

Notes  receivable 

Due  from  subscribers  and  agents 96, 97 

Accounts  receivable 

Materials  and  supplies 17, 18, 133 

Special  funds ^^'^^ 

Prepayments. 34, 152 

Other  debit  accounts 7,21,22,67,69,73,93,94,172 

Capital  stock 

Funded  debt ^'^3 

Depreciation  reserve ^ 

Other  credit  accounts 8, 21, 24, 93, 160 

Surplus 13,21,33,36,78,90,91,92,93,108,172 

Plant  and  Equipment. 

Intangibles 41,42,73 

Land  and  buildings 11,43,45,46 

Central  office  equipment 47,48,49,50,51,52 

Station  equipment 47, 55 

Exchange  lines 59, 61, 98 

Toll  lines 35,59,61,98 

General  equipment 25, 52, 53, 62, 63 

Undistributed  construction  expenditures 38, 64, 65, 66,  71, 161, 176 

Income. 

Miscellaneous  income 12, 20, 64, 75, 76, 80, 81 

Other  operating  expenses 8 

Taxes 71,72,73,74 

Interest  accrued .- 18, 78, 87, 88, 89 

Miscellaneous  charges  to  income 67, 69, 78, 81, 96, 97 

Operating  Revenues. 

Exchange  revenues 80, 95, 101, 104, 106 

Toll  revenues 80,99,101,106 

Miscellaneous  revenues 80, 102, 105, 106, 107, 109, 139, 148, 153 

,  Licensee  revenues — Cr ^^ 

(51) 


I 


52 

Operatino  Expenses. 

Ctuae. 

600.  Repairs  of  wire  plant 56,61,82,119,120,121,122,131 

610.  Repairs  of  equipment 52, 120, 125, 126, 127, 128, 131 

620.  Station  removals  and  changes 32,  79, 130, 131 

640.  Other  maintenance  expenses 34, 53, 68, 129, 131, 157, 173, 175, 176 

650.  Operators'  wages 139, 140 

660.  Other  traffic  expenses 105, 127, 136, 137, 138, 143, 144, 145, 146, 148 

670.  General  office  salaries 113, 114, 136, 150, 155, 157, 158 

680.  Other  general  expenses 42, 44, 52, 60, 

63, 66, 69,  79, 83, 84, 85, 94, 101, 102, 104, 136, 144, 146, 147, 149, 151, 152, 

153, 154, 156, 158, 159, 160, 161, 162, 163, 164, 165, 167, 168, 169, 172, 174 

General  Instructions. 

1.  Telephone  companies  divided  into  four  classes 1,4 

12.  Reconstruction 121, 122, 123, 132, 133 

13.  Plant  and  equipment  retired 32, 37 

14.  Repairs 128 


INDEX  BY  TOPICS. 
Class  A,  B,  and  C  Companies. 


A. 

Case. 

Accounts,  clearing ^ 

temporary ^ 

titles  of,  on  company's  books 1 

Addressing  machine  supplies ^^ 

Adjustment  of  furniture  and  fixtures  costs 52 

of  general  equipment  costs 62 

of  revenue,  expense,  and  income  items 91 

Appraisal  of  furniture  and  fixtures 52 

of  going  plant  purchased 27,  29 

of  plant 27,29,172 

Associations,  telephone,  expenses  of 1^4 

Attachments  to  plant,  inspection  of ^'^^ 

Attorneys,  temporary,  pay  and  expenses  of 41, 159 

Audit  of  books ^^"^ 

Auditor  of  receipts  and  clerks 1^0 

Automatic  equipment,  students 125 

equipment,  switchmen 125, 127 

Awnings ^^'^^ 

B. 

Balance  sheet ^ 

Balance-sheet  accounts ^ 

Balcony  on  main  frame ^ 

Bank  failure ^^ 

Battery  taps,  receipts  from ^^ 

Bills  against  subscribers ^^ 

Bond,  given  in  construction  or  maintenance  work 164 

judicial,  in  damage  suit 1^3 

Bond  or  negative  return ^0 

Bonds,  examination  of  validity  of  issue  of 69 

maturing  serially,  discount  on 67 

Bonus  paid  contractor 

Booths  and  special  fittings  retired ^2 

Bridle  wire  cables 

Brokers'  fees  and  commissions 

CO 

Buildings,  appurtenances  to 

improvements  on  leased ^^ 

minor  additions  or  replacements '*6 

not  used  in  telephone  operations 10, 11 

rented,  repairs  of ^^ 

(53) 


54 
c. 

Cable,  terminals,  changes  in 120 

underground,  without  conduit 59 

Cash,  distinguished  from  special  deposits 14 

Certificates  of  deposit 14 

Check,  loss  account  of  forged 169 

Circuits,  rent  of 85 

Clearing  accounts 1, 25, 46 

Coin-box  service  revenue IO4 

shortages 100 

Commission,  at  pay  stations 14g 

brokers* 9 

in  lieu  of  salary II3 

on  securities  purchased 9 

on  toll  messages 99 

State,  expense  of 72 

State,  reports  to I57 

Connecting  company,  operating  performed  by 148 

repairs  to  lines  of 134 

Construction,  interest  during 64 

Contract,  payment  for  abn^ation  of 33 

Contractor's  penalties  for  delay 33 

Contributions  made I49 

Custom  work 20 

D. 

Deductions  from  pay  for  hospitals 24 

Delayed  items  of  revenue,  expense,  and  income 90 

Departmental  expense,  transfer  of Ill 

Department  store  contract  revenue 104 

Deposits,  certificates  of 14 

special,  distinguished  from  cash 14 

special,  for  dividends 15, 16 

subscribers',  imclaimed 108 

time 14 

with  municipalities 22 

Depreciation  on  improvements  on  leased  buildings 34 

on  physical  property  (not  telephone) 8 

reserve,  subdivision  of 4 

Direct<»ies,  covers,  chains,  and  locks 145 

sale  of  old 153 

sal  v£^e  on  old 153 

special  editions  of 152 

Directory  advertising  errors 102 

errors 101 

Disconnecting  subscribers'  lines 126 

subscribers*  stations 130 

Discount  on  bills  for  materials  and  supplies 18 

bonds  maturing  serially 67 

reacquired  securities 93 

short-term  notes 88 

subscribers*  bills 95 

Distribution  of  pay  and  expenses  of  employees 110 


55 


Case, 

Dividends  paid  as  part  of  rent 81 

special  deposits  for 15 

unclaimed 1^8 

Donations  received ^^ 

E. 

Electrolysis  bond  opener 60 

Electrolytic  surveys 58 

Employees,  distribution  of  expenses  of HO 

Employees  engaged  in  operation  and  construction 40 

Equipment,  general,  adjustment  of  costs 62 

maintained  by  lessees 47 

order  table  systems 55 

overhauling  and  repairing 175 

{See  also  Plant  and  Equipment.) 

Examination  of  titles  of  real  estate 69 

Exchange  of  services 103 

Expense  items,  adjustment  of 91 

delayed 90 

spread  over  subsequent  periods 117 

Experimental  accounts 1 

F. 

Farmer  lines,  repairs  to 134 

.  Fees,  brokers' 9 

for  pole  and  conduit  locations 98 

Fire  extinguishers 54 

First-aid  kits 171 

Foremen  of  repair  gangs 114 

Franchise,  free  or  reduced-rate  service  under 103 

plant  and  supplies  furnished  under 42 

taxes 74 

Franks 168 

Free  telephone  service 103 

Furniture  and  fixtures,  cost,  repairs,  and  replacements 52, 53 

repairs  to 133 

O. 

Gramisheed  wages,  loss  account  of 170 

Governments,  expense  of  making  reports  to 157 

expense  of  testifying  before 157 

H. 

Handbooks  for  plant  department 68 

Hospital  funds 24 

Hotel  contract  revenue 104 

I. 

Improvements  on  leased  buildings 34 

income  items,  adjustment  of 91 

delayed 90 

Information,  detailed,  in  records 2 

Inspection  of  attachments  to  j^oles 173 


56 

C&se. 

Insurance,  liability W 

on  construction 65, 161 

on  materials  and  supplies 161 

on  telephone  earnings  and  receipts 162 

reserve 160 

Intangible  capital,  term  of  life 26 

Interest  on  bills  for  materials  and  supplies 18 

on  funds  used  in  construction 64 

on  securities  held  by  trustees 76, 78 

on  unpaid  bond  coupons 87 

on  unpaid  taxes 89 

paid  as  part  of  rent 81 

special  deposits  for 16 

Interstate  Commerce  Commission,  authority  of,  necessary 52, 90, 91, 117 

reports  to 3, 6, 157 

Inventory  of  furniture  and  fixtures 52 

general  equipment 62 

going  plant  purchased 29 

plant 172 

L. 

Land  held  for  future  operations 11 

not  used  in  telephone  operations 10 

rent  of,  for  storage  of  material 176 

Lease,  surrender  of  unexpired 92 

Leased  buildings,  improvements  on 34 

Liability  insurance 66 

Loading  coils 51 

Loss  on  account  of  bank  failure 94 

account  of  forged  check 169 

account  of  gamisheed  wages 170 


Main  frame  balcony * 50 

Manager,  at  small  exchange 112, 113 

general,  pay  and  expenses  of 155 

shortage  in  account 154 

Manholes,  cleaning 56 

Material,  defective,  in  construction 33 

Materials  and  supplies,  charged  out  directly 17 

discount  on  bills  for 18 

insurance  on 65, 161 

interest  on  bills  for 18 

purchased  from  another  company 30 

recovered  from  plant 132 

rent  of  land  for 176 

taxes  on 71 

Messenger  services 105 

Meters,  expense  of  reading 138 

Mileage  on  toll  messages 99 

Morse  leased  lines 140 

Moves  and  changes,  uncollectible  bills  for 79 

of  plant  account  street  improvements 122 

of  plant  by  public  requirement 121 


57 

Case. 

Moving  an  employee 1^^ 

Municipalities,  bonds  given  to 1^ 

deposits  with 22 

fees  paid  for  pole  or  conduit  location 98 

free  or  reduced-rate  service  for 103 

maintenance  and  operation  of  plant  leased  to 42 

plant  and  supplies  furnished  to 42 

replacements  and  moves  required  by 121 

N. 

Newspaper,  company,  expense  of 165 

Notes  becoming  due  serially 23 

payment  defaulted '^ 

short-term,  issued  in  lieu  of  bonds 88 

0. 

Operating  expenses,  property  of  small  value  charged  to 25, 46 

performed  by  connecting  company 148 

Operators,  joint 1'^^ 

private  branch  exchange 139 

Options 21 

Order  table  systems 55 

Overhead  wires,  damage  to,  account  moving  building 119 

P. 

Party  lines,  reassociation  of 120 

Patents c ^^ 

Pay-station  expenses  and  commissions 1^6 

Penalties,  contractors,  for  delay ^ 

Phantom  circuits ^^ 

Plant  and  equipment,  inventory  of  purchased  plant 29 

items  of  small  value .' 25, 46 

purchase  of  going  plant 27, 30 

purchased,  intangibles 26 

retired,  original  cost 31 

sale  of  portion 37 

structural  value 28 

under  construction,  insurance  on 65 

{See  also  Equipment.) 

Plant  department  expense  other  thkn  repairs 131 

hand  books 68 

Plant  supervision  expense 1^2 

Pole  butt  reinforcements 123 

lines,  moves  of 121»  122 

locations,  rent  for 84 

Postage  on  subscribers'  bills 151 

toll  reports l'*^ 

toll  tickets 143,144 

Premium  on  reacquired  securities 93 

Private  branch  exchange  for  company  business 141 

operators 139 

retired 32 


58 


Property  of  others,  expenditures  on 35 

Property  rights,pennanent,  granted 38 

temporary,  granted 39 

Protection  from  high-potential  line 61 

Protectors 48 

R. 

Rates,  expense  of  board  of  arbitrators  on -. 166 

expense  of  figuring 136 

Reassociation  of  party  lines 120 

Receivers,  pay  and  expenses  of 158 

Reconstruction 121, 122, 123, 132, 133 

Reduced-rate  telephone  service 103 

Reinsurance 160 

Rent,  interest  and  dividends  paid  as 81 

of  buildings 80 

of  circuits 85 

of  instruments 75 

of  land  for  storage  of  material 176 

of  physical  property  (not  telephone) 12 

of  pole  locations 84 

of  property  sublet 86 

of  rooms  used  by  manager 106 

Rented  property,  expenses  on 12, 34, 80 

repairs  of 12, 34, 80, 129 

Replacement  of  component  part  of  subscriber's  station 128 

furniture  and  fixtures 62 

plant 121,122 

Reports  to  governmental  bodies 157 

Interstate  Commerce  Commission 3, 6, 157 

Reserve  for  depreciation 4 

insurance 160 

uncollectible  bills 96 

Retaining  wall 45 

Revenue  items,  adjustment  of 91 

delayed 90 

Right,  permanent,  sale  or  purchase  of 38 

temporary,  sale  or  purchase  of 39 

to  cross  right  of  way 83 

Route  book 136 

S. 

Schools,  automatic  equipment 125 

plant  department 124 

Screens,  door  and  window 34, 53 

Seciuities  held  by  trustees 76, 78 

of  other  companies,  profits  and  loss  on 13 

purchased,  commissions  on 9 

reacquired 5, 93 

treasury 6 

Serial  notes 23 

Services,  exchange  of 103 

of  one  department  for  another Ill 


59 


Case. 

Shades,  window 34, 53 

Shortage  in  manager's  account 154 

Sidewalks,  cost  of - ^^ 

Signs ^ 

Sinking  funds 19,77,78 

Spreading  large  items  of  expense 117 

Stamps,  internal-revenue 73 

postage,  on  subscribers'  bills 151 

toll  reports 143 

toll  tickets 143,144 

Stationery  and  printing " 147 

Strike,  additional  pay  account  of 118 

Structural  value  of  plant 27, 28 

Students,  automatic  exchange 125 

plant  department 124 

Subaccounts,  titles  of 1 

Subforemen  of  repair  gangs 114 

Subscribers'  ledger  charges ^5 

Subsidiary  records 2 

Superintendent,  pay  and  expenses 114, 155 

Supervision  of  employees 114 

Supply  expense 142 

Switching  toll  messages ^ 

Switchman  in  automatic  exchanges 127 

T. 

Tariff  books 136 

Tax  reports,  expense  of  preparing 157 

Taxes ,  accrual  of 70 

franchise 74 

on  materials  and  supplies 71 

unpaid,  interest  on 8^ 

Temporary  accoimts 1 

Testifying  before  governmental  bodies 157 

Toll  messages  defined ^ 

mileage  on 99 

switching  of ^^ 

•Trafl5c  errors 1^1 

inspectors 137 

Transfer  of  expense  between  departments HI 

Troublemen,  pay  and  expenses  of 115 

Trucks,  overhauling  and  repairing 175 

Trustees,  sum  paid  to,  for  unmatured  interest 16 

U. 

Unclaimed  deposits,  dividends,  and  wages 108 

refunds  on  service 107 

Uncollectible  bills  for  revenue 96, 97 

supplies 79 

work  performed 79 

Unit  costs,  use  of,  in  retiring  property. 31 

Use-and-occupancy  insurance 162 


60 


V. 

Case. 

Valuation  of  plant  expenses 172 

W. 

Wages  unclaimed 108 

Wall,  retaining 45 

Window  shades 34, 53 

Wire  chief,  pay  and  expenses  of 116, 140 

Work  for  others  in  exchange  for  privilege 82 

performed  for  others 20 

O 


.  UNIFORM  SYSTEM  OF  ACCOUNTS 


FOR 


TELEPHONE  COMPANIES 


OL..A.SS  C 


PRESCRIBED  BY  THE 

INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


ISSUE  OF  1915 
EiTBcnvE  ON  January  1, 1915 


WASHINGTON 

GOVERNMENT  PRINTING  OFPICSE 

1914 


OOLUMaiA  UNIVERSITY 


UNIFORM  SYSTEM  OF  ACCOUNTS 


FOR 


TELEPHONE  COMPANIES 


CI 


c 


PRESCRIBED  BY  THE 

INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


ISSUE  OF  1915 
Effective  on  January  1, 1915 


'^^^:W/m'M 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1914 


t.* 


THE  INTERSTATE  COMMERCE  COMMISSION. 


James  S.  Harlan,  of  Illinois. 
JuDSON  C.  Clements,  of  Georgia. 
Edgar  E.  Clark,  of  Iowa. 
Charles  C.  McChord,  of  Kentucky. 
Balthasar  H.  Meyer,  of  Wisconsin. 
Henry  C.  Hall,  of  Colorado. 
WiNTHROP  M.  Daniels,  of  New  Jersey. 

George  B.  McGinty,  Secretary. 

(2) 


i 


CONTENTS. 


Page. 

Order  of  the  Commweion 5 

Introductory'-  letter 7 

General  inptructionfl: 

Telephone  companies  divided  into  four  classes 9 

Clasfiiiicationfl  of  accoiinta -, 9 

Separation  of  excliange  and  toll  systems 9 

Balance  sheet  defined 10 

Plant  and  equipment  accounts  defined 10 

Income  accounts  defined 10 

Operating  revenues  defined 10 

Operating  expenses  defined 10 

Cost  of  plant  and  equipment 10 

Plant  and  equipment  in  service  .lanuary  1 ,  1915 11 

New  construction H 

Reconstruction H 

Plant  and  equipment  retired 12 

Repairs 12 

Cost  of  repairs 12 

Depreciation 12 

list  of  accounts: 

Balance-sheet  accounts 15 

Plant  and  equipment  accounts 15 

Income  accounts 16 

Operating  revenue  accounts 16 

Operating  expense  accounts 16 

Text  of  accounts: 

Balance-sheet  accounts 17 

Plant  and  equipment  accounts 21 

Income  accounts 23 

Operating  revenue  accounts 25 

Operating  expense  accounts 27 

Index  to  system  of  accounts 29 

APPENDIX. 

Bookkeeping  HysUMii  for  small  companies 'A 

(3) 


' 


ORDER. 

At  a  General  Session  of  the  INTERSTATE  COMMERCE 
COMMISSION,  held  at  its  office  in  Washington,  D.  C, 
on  the  13th  day  of  October.  1914. 

The  subject  of  a  Uniform  System  of  Accounts  to  be  prescribed  for 
and  kept  by  t^^lephone  companies  being  under  consideration,  the 
following  order  was  entered : 

It  is  ordered,  That  the  Uniform  System  of  Accounts  for  Telephone 
Companies,  Class  C,  with  the  text  pertaining  thereto,  embodied  in 
printed  form  to  be  hereafter  known  as  Issue  of  1915,  a  copy  of  which 
is  now  before  this  Commission,  be,  and  the  same  is  hereby,  approved; 
that  a  copy  thereof  duly  authenticated  by  the  Secretary  of  the  Com- 
mission be  filed  in  its  archives,  and  a  second  copy  thereof,  in  like 
manner  authenticated,  in  the  office  of  the  Division  of  Carriers' 
Accounts;  and  that  each  of  said  copies  so  authenticated  and  filed 
shall  be  deemed  an  original  record  thereof. 

It  is  further  ordered^  That  the  said  Uniform  System  of  Accounts  for 
Telephone  Companies,  Class  C,  with  the  text  pertaining  thereto,  be, 
and  the  same  is  hereby,  prt>scribed  for  the  use  of  Class  C  telephone 
companies  (those  having  annual  operating  revenues  exceeding  $10,000 
but  not  more  than  $50,000) ,  subject  to  the  provisions  of  the  Act  to 
Regulate  Commerce  as  amended,  in  the  keeping  and  recording  of 
their  accounts;  that  each  and  every  such  carrier  and  each  and  every 
receiver  or  operating  trustee  of  any  such  carrier  l)e  required  to  keep 
all  accounts  in  conformity  therewith;  and  that  a  copy  of  the  said 
issue  be  sent  to  each  and  every  such  carrier  and  to  each  and  every 
receiver  or  operating  trustee  of  any  such  carrier. 

It  is  further  ordered,  That  any  such  carrier  or  any  receiver  or 
operating  trustee  of  any  such  carrier  may  subdivide  any  primary 
accoimt  in  the  said  issue  (as  permitted  in  the  general  instructions  con- 
tained therein);  or  may  make  assignment  of  the  amount  charged  to 
any  such  primary  account  to  operating  divisions,  to  its  individual  lines, 
or  to  Stat-es:  Provided,  however,  That  such  subprimary  accounts  set 
up  or  such  assignments  made  by  any  such  carrier  or  by  any  receiver 
or  operating  trustee  of  any  such  carrier  do  not  impair  the  integrity 
of  the  accounts  hereby  prescribed. 

It  is  further  ordered.  That  in  order  that  the  basis  of  comparison 
with  previous  years  be  not  destroyed,  any  such  carrier  or  any  receiver 

(5) 


or  operating  trustee  of  any  such  carrier  may,  during  the  twelve 
months  ending  December  31,  1915,  keep  and  maintain,  in  addition 
to  the  accounts  hereby  prescribed,  such  portion  or  portions  of  its 
present  accounts  as  may  be  deemed  desirable  by  any  such  carrier, 
or  by  any  receiver  or  operating  trustee  thereof,  for  the  purpose  of 
such  comparison;  or,  during  the  same  period,  may  maintain  such 
groupings  of  the  primary  accounts  hereby  prescribed  as  may  be 
desired  for  that  purpose. 

It  is  further  ordered^  That  any  such  carrier  or  any  receiver  or  oper- 
ating trustee  of  any  such  carrier,  in  addition  to  the  accounts  hereby 
prescribed,  may,  unless  otherwise  ordered,  keep  any  temporary-  or 
experimental  accounts  the  purpose  of  which  is  to  develop  the  effi- 
ciency of  operation:  Provided j  however,  That  such  temporary  or  ex- 
perimental accounts  shall  not  impair  the  integrity  of  any  primary 
iiccoimt  hereby  prescribed. 

It  is  further  ordered,  That  January  1 ,  1915,  be,  and  is  hereby,  fixed 
as  the  date  on  which  the  said  issue  of  the  Uniform  System  of  Ac- 
counts for  Telephone  Companies,  Class  C,  shall  become  effective. 

By  the  Commission: 

(Seal)  Gfx>ror  B.  MoGinty, 

Secretary. 


i 


i 


INTRODUCTORY  LETTER. 


Interstate  Commerce  Commission, 

Division  of  Carriers'  Accounts, 

Washington,  October  IS,  1914- 
To  C^ss  C  Telephone  Companies: 

This  Uniform  System  of  Accounts  for  Telephone  Companies, 
Class  C,  is  that  approved  and  prescribed  in  the  order  of  the  Interstate 
Commerce  Commission,  the  text  of  which  immediately  precedes  this 
letter.  The  Act  to  Regulate  Commerce  as  amended  invests  the  Com- 
mission with  authority  to  prescribe  the  forms  of  accounts  to  be  kept 
by  telephone  companies  subject  to  the  act,  and  prohibits  the  use  of 
any  accounts  other  than  those  prescribed  by  the  Commission.  The 
observance  of  the  rules  and  regulations  stated  in  this  system  of 
accounts  therefore  becomes  obUgatory  upon  persons  having  direct 
charge  of  the  accounts  of  the  companies  concerned,  and  such  persons 
will  be  held  responsible  for  their  proper  appUcation. 

To  enable  telephon^^companies  to  determine  their  status  under  the 
Act  to  Regulate  Commerce,  the  following  conference  ruling  of  the 
Commission,  promulgated  March  13,  1911,  is  quoted: 

No.  305.  Application  of  thb  Amended  Act  to  Telegraph  and  Telephone 
Companies: 

(a)  Each  and  every  telegraph  and  telephone  company  which  transmits  messages 
over  its  line  or  lines  from  a  point  in  one  State,  territory,  or  district  of  the  United  States 
to  any  other  State,  territory,  or  district  of  the  United  States,  or  to  any  foreign  country, 
is  subject  to  the  provisions  of  the  act. 

(6)  If  a  telegraph  or  telephone  company,  the  line  of  which  is  wholly  within  a 
single  State,  territory,  or  district  of  the  United  States,  receives  a  message  within 
such  State,  Territory,  or  District  of  the  United  States,  for  transmission  to  a  point 
without  the  State,  territory,  or  district  of  the  United  States,  which  it  transmits  over 
its  line  to  another  point  in  the  same  State,  territory,  or  district  of  the  United  States 
and  there  delivers  it  to  an  interstate  line  for  transmission  to  destination,  the  first- 
named  company  by  virtue  of  its  participation  in  this  transaction,  is  not  made  subject 
to  the  provisions  of  the  act,  unless  there  be  an  arrangement  between  that  company 
and  its  connection  for  through  continuous  transmission  of  such  messages,  in  which 
latter  case  all  of  the  participating  companies  in  such  through  continuous  transmission 
are  subject  to  the  provisions  of  the  act, 

(c)  If  two  or  more  lines  are  connected  so  that  a  person  within  one  State,  Territory, 
or  District  of  the  United  States  talks  with  a  person  at  a  point  without  such  State, 
Territory,  or  District  of  the  United  States,  or  so  that  a  message  is  transmitted  directly 
from  a  point  within  a  State,  Territory,  or  District  of  the  United  States  to  a  point 
without  the  same,  the  transmission  of  messages  in  this  maimer  constitutes  interstate 
commerce  and  brings  all  of  the  participating  lines  within  the  purview  of  the  act. 

{d)  It  follows  that  telegraph  and  telephone  companies  subject  to  the  act,  as  above 
indicated,  must  conform  to  the  provision  of  section  1  thereof  requiring  that  all  of 
their  rates  and  charges  for  the  transmission  of  interstate  messages  eliall  be  reasonable 

35819°— 14 2  (7) 


and  just,  and  that  such  companies  may  lawfully  issue  franks  covering  free  interstate 
service  or  may  grant  free  interstate  service  to  the  same  extent,  and  subject  to  the 
same  limitations  as  other  common  carriers  under  the  provisions  of  said  section. 

(e)  Such  telegraph  and  telephone  companies  subject  to  the  act  are  also  governed 
by  the  provisions  of  section  3  forbidding  any  undue  or  unreasonable  preference  or 
advantage  by  rebates  or  otherwise,  or  any  imdue  or  imreasonable  prejudice  or  disad- 
vantage in  any  respect  whatsoever,  and  are  subject  to  the  lawful  orders  of  the  Com- 
mission made  pursuant  to  the  provisions  of  section  15  of  the  act,  and  also  of  section  20 
thereof  respecting  the  keeping  of  accounts  and  memoranda  and  the  making  of  roporta 
to  the  CJommission. 

Although  the  Imes  of  a  company  may  be  entirely  within  one  State, 
if  it  handles  interstate  messages  for  long-distance  companies  on  a 
commission  basis  or  otherwise  handles  interstate  messages  under  the 
conditions  named  in  paragraph  c  of  the  ruling,  it  is  subject  to  the 
Act  to  Regulate  Commerce. 

The  system  of  accoimts  prescribed  herein  apphes  only  to  Class  C 
companies  (those  having  annual  operating  revenues  exceeding  $10,000 
but  not  over  $50,000).  The  system  for  the  larger  companies  has 
been  in  effect  since  January  1,  1913,  and  is  contained  in  a  separate 
pubhcation. 

It  has  been  the  aim,  in  preparing  the  system  of  accoimts,  to  make 
it  as  simple  as  possible,  and  at  the  same  time  furnish  such  infor- 
mation as  is  needed  by  the  Commission  and  is  useful  to  the  compa- 
nies. It  is  believed  that  this  system  of  accounts  will  be  sufficient 
to  meet  the  requirements  of  Class  C  companies  and  will  not  be 
difficult  of  application.  If,  however,  any  Class  C  companies  desire  to 
keep  their  accounts  in  greater  detail,  they  may  subdivide  any  of 
the  accounts  prescribed  herein,  or  may  adopt  the  system  prescribed 
for  Class  A  or  Class  B  companies. 

In  formulating  this  system  of  accounts  it  has  been  the  endeavor 
to  enlist  the  cooperation  of  the  telephone  companies  and  of  the 
various  State  commissions  having  supervision  of  telephone  com- 
panies. For  that  purpose  the  system  of  accounts  in  tentative  form 
has  been  submitted  for  criticisms  and  suggestions,  and  due  consid- 
eration has  been  given  to  all  responses  received. 

Accounting  officers  are  invited  to  correspond  with  this  office  should 
question  arise  with  regard  to  the  correct  interpretation  of  any  ac- 
count or  rule  prescribed  in  the  system  of  accoimts,  in  order  that 
uniformity  may  be  secured  in  the  apphcation  of  its  provisions. 

As  an  aid  to  the  smaller  telephone  companies  in  the  keeping  of 
their  accoimts,  there  is  contained  in  the  appendix  a  bookkeeping 
system  for  small  telephone  companies.  This  form  of  bookkeeping 
is  suggestive  only,  and  it  is  not  required  that  the  companies  make 
use  of  it  either  in  whole  or  in  part.  The  companies  may  for  the  pres- 
ent adopt  any  bookkeeping  system  they  desire,  so  long  as  the  one 
adopted  will  produce  the  results  required  by  the  system  of  accoimts 

herein  prescribed, 

Fred  \V.  Sweney, 
Chief  Examiner  of  Accounts, 


! 


GENERAL  INSTRUCTIONS. 


The  records  of  telephone  companies  shall  be  kept  with  sufficient 
particularity  to  show  fully  the  facts  pertaining  to  all  entries  made  in 
the  accounts  provided  herein.  Where  the  full  information  is  not 
recorded  in  the  general  books,  the  entries  therein  shall  be  supported 
•  by  other  records  in  which  the  full  details  shall  be  shown.  Such 
general  book  entries  shall  contain  sufficient  reference  to  the  detail 
records  to  permit  ready  identification  of  the  latter,  and  the  detail 
records  shall  be  filed  in  such  manner  as  to  be  readily  accessible  for 
examination  by  representatives  of  the  Interstate  Commerce  Com- 
mission. 

1.  Telephone  companies  divided  into  four  classes. — For  the  purposes  of  the  systems 
of  accounts  prescribed  by  the  Interstate  Commerce  Commission  telephone  companies 
are  divided  into  four  classes,  as  follows: 

Claas  A.  Companies  having  average  annual  operating  revenues  exceeding  $250,000. 

Claae  B.  Companies  having  average  annual  operating  revenues  exceeding  $50,000, 
but  not  more  than  $250,000. 
A  Class  C.  Companies  having  average  annual  operating  revenues  exceeding  $10,000, 

^  but  not  more  than  $50,000. 

Class  D.  Companies  having  average  annual  operating  revenues  of  $10,000  or  less. 

The  system  of  accounts  contained  herein  applies  to  Class  C  companies  and  shall  be 
observed  by  all  Class  C  companies  (as  defined  above)  that  are  subject  to  the  Act  to 
Regulate  Conmierce.  Class  C  companies  which  desire  more  detailed  accounting 
may  subdivide  the  accounts  prescribed  herein,  or  they  may  adopt  in  whole  or  in 
part  the  classifications  prescribed  for  Class  A  or  for  Class  B  companies.  The  classi- 
fications for  Class  A  and  Class  B  companies  are  contained  in  a  separate  publication. 

No  detailed  classifications  of  accounts  are  at  present  prescribed  for  Class  D  com- 
panies. 

2.  Classlflcations  of  accounts. — The  system  prescribed  herein  for  Class  C  com- 
panies contains  the  following  general  classifications  of  accoimts: 

(a)  Balance-sheet  accounts. 
(h)  Plant  and  equipment  accounts. 
^  \e)  Income  accounts. 

(a)  Operating  revenue  accounts. 
(<)  Operating  expense  accounts. 

3.  Separation  of  exchange  and  toll  systems. — If  a  company  operates  two  or  more 
exchange  systems  or  toll  systems  the  accounts  for  the  plant  and  equipment,  operating 
revenues,  and  operating  expenses  shall  be  kept  in  such  manner  a;3  will  indicate  the 
items  wliich  pertain  solely  to  any  one  exchange  system  or  any  one  toll  system.  The 
items  pertaining  to  two  or  more  systems  shall  be  designated  as  comirKm,  It  is  not 
required  that  the  companies  keep  separate  sets  of  accounts  for  each  exchange  or  toll 
system,  although  this  may  be  done  if  desired.  It  is  only  necessary  that  the  items 
be  noted  to  indicate  the  exchange  or  toll  system  to  which  they  pertain,  or  be  noted 
common  to  show  that  they  are  applicable  to  the  entire  property. 

(9) 


10 

By  an  exchange  system  is  meant  the  property  devoted  to  telephone  service  within 
the  area  referred  to  and  usually  described  in  contracts  with  subscribers  as  that  within 
which  local  service  is  furnished  at  rates  specified  in  such  contracts.  An  exchange 
eystem  may  include  one  or  more  central  oflBces. 

By  a  toll  system  is  meant  the  property  devoted  to  the  operation  of  long-distance 
or  toll  lines  which  connect  different  exchange  systems  where  a  charge  is  made  for  the 
use  of  such  lines  separate  and  apart  from  the  charge  for  exchange  service.  Ueually 
a  company  would  have  one  toll  system  only. 

4.  Balance  sheet  defined. — The  balance  sheet  is  a  statement  of  theajssets,  liabilities, 
and  surplus  or  deficit  of  a  business  at  a  given  time.  It  contains  a  statement  of  the 
ledger  balances  after  the  accounts  covering  the  revenues,  expenses,  and  other  income 
items  liave  been  closed  into  "  Surplus." 

5.  Plant  and  equipment  accounts  defined. — The  plant  and  equipment  accounts,  some- 
times termed  fixed  capital  or  construction  accounts,  are  the  accounts  which  show  the 
investment  in  property,  both  tangible  and  intangible,  used  in  the  telephone  opera- 
tions and  in  operations  incident  thereto.  Ten  primary  plant  and  equipment  ac- 
counts (Noe.  200  to  290)  are  provided.  The  investment  in  plant  and  equipment  shall 
be  distributed  over  these  accounts  in  accordance  with  the  texts  of  the  accounts. 

6.  Income  accounts  defined. — The  income  accounts  are  the  accounts  which  show 
the  amounts  of  money  that  the  company  has  received  or  becomes  entitled  to  receive 
for  services  rendered  during  a  given  period,  the  return  accruing  during  the  period 
upon  investments,  and  the  disbursements  and  obligations  incurred  that  affect  the 
disposition  of  the  amounts  so  received  or  accrued. 

The  balances  in  these  accounts  shall  be  drawn  together  annually  in  a  ledger  account 
or  in  a  statement  form  which  will  give  the  net  income  (or  net  loss)  for  the  year.  Thia 
balance  shall  then  be  transferred  to  the  account  **  Surplus,"  which  shows  the  ac- 
cumulated undivided  profits  (or  deficit)  of  the  company. 

7.  Operating  revenues  defined. — By  operating  revenues  are  meant  all  moneys  which 
the  company  receives  or  becomes  entitled  to  receive  for  telephone  service  and  for  serv- 
ices incident  thereto.  Credits  to  the  revenue  accounts  shall  be  based  upon  the 
gross  charges  made  for  the  service  rendered  by  the  company.  The  totals  of  the  pri- 
mary operating  revenue  accounts  shall  be  transferred  annually  to  the  Income  Account 
under  title  of  account  No.  300,  "Telephone  operating  revenues." 

8.  Operating  expenses  defined. — By  operating  expenses  are  meant  the  expenses  of 
maintaining  the  property  devoted  to  telephone  operations,  the  expenses  of  conducting 
the  telephone  operations  and  services  incident  thereto,  the  expenses  of  collecting 
revenues  and  of  accounting,  and  the  general  and  supervisional  expenses  in  connection 
with  the  foregoing.  The  totals  of  the  primary  operating  expense  accounts  shall  be 
transferred  annually  to  the  Income  Account  under  title  of  account  No.  330,  "Tele- 
phone operating  expenses." 

9.  Cost  of  plant  and  equipment.— The  term  cost  as  used  in  the  plant  and  equipment 
(construction ")  accounts  means  the  actual  cost  in  money  of  labor  and  materials  used  in 
construction,  the  actual  cost  in  money  of  property  acquired  after  construction,  or,  if 
the  consideration  given  is  other  than  money,  the  actual  money  value  of  such  other 
consideration  at  the  time  of  the  purchase.  Cost  of  labor  includes  not  only  wages, 
salaries,  and  fees  paid  employees,  but  also  personal  expenses  of  such  employees  when 
borne  by  the  company.  Cost  of  materials  and  supplies  consumed  in  construction  is 
their  cost  at  the  places  where  they  enter  into  constniction,  including  cost  of  transpor- 
tation and  inspection. 

If  officers  and  employees  of  an  operating  company  are  specially  assigned  to  con- 
struction work,  an  equitable  proportion  of  their  salaries  and  expenses  shall  be  cluirged 
to  Plant  and  Equipment.   No  charges,  however,  shall  be  made  to  plant  and  equipment 


11 


accounts  for  merely  incidental  services  of  officers  and  employees  whose  time  is  regu- 
larly devoted  to  the  operation  and  maintenance  of  the  plant. 

10.  Plant  and  equipment  in  service  January  1, 1915. — The  cost  or  ledger  value  of  plant 
and  equipment  on  hand  January  1, 1915,  shall  be  charged  to  primary  plant  and  equip- 
ment accounts  Noe.  200  to  270,  if  such  distribution  can  be  acciuately  made.  If  not 
possible  to  make  such  distribution,  the  entire  cost  or  ledger  value,  or  that  portion 
which  can  not  be  distributed,  shall  be  charged  to  account  No.  290,  "Plant  and 
equipment  in  service  January  1,  1915,"  until  such  time  as  the  distribution  may  be 
possible. 

11 .  New  construction. — When  any  new  plant  and  equipment  is  constructed  or  other- 
wise acquired,  the  cost  thereof  shall  be  charged  to  the  various  primary  plant  and 
equipment  accounts  (Nos.  200  to  280)  in  accordance  with  the  text  of  the  accounts. 

12.  Ecconstruction. — Reconstniction  (or  extraordinary  repairs)  includes  the  fol- 
lowing: ^• 

(a)  Restoring  to  an  efficient  or  proper  condition  buildings,  structures,  or  other  units 
of  property  which  have  deteriorated. 

(6)  Substituting,  in  order  to  maintain  normal  efficiency,  new  parts  for  old  parts  of 
continuous  structures,  such  as  pole  lines,  cables,  wires,  and  cond,uits. 

(c)  Restoring  the  condition  of  property  damaged  by  storm,  flood,  fire,  or  other 

casualty. 

(d)  Recovering  salvage  and  removing  retired  or  abandoned  property  in  connection 

with  above-mentioned  work. 

Reconstruction  should  be  taken  into  consideration  in  arriving  at  a  rate  of  depre- 
ciation as  explained  in  section  16.  Care  should  be  taken  to  see  that  ordinary  current 
repairs  as  defined  in  section  14  are  not  handled  as  reconstruction. 

When  plant  and  equipment  is  reconstructed  and  the  property  as  reconstructed  is  of 
no  greater  use  or  capacity  than  was  the  original  property  the  cost  of  reconstruction  shall 
be  treated  as  follows: 

Debit — 
To  account  No.  185,  "Depreciation  reserve,"  the  amount  carried  there- 
in with  respect  to  such  property. 

To  account  No.  135,  '^Materials  and  supplies,"  the  value  of  salvage  re- 
covered from  original  property. 

To  accounts  for  operating  expenses  (Nos.  600,  610,  or  640),  the  remain- 
der of  the  cost  of  reconstruction. 
Credit — 
To  account  No.  115,  "Cash,"  or  to  other  appropriate  accounts,  the  cost 
of  reconstruction. 
If  the  property  as  reconstructed  is  more  useful  or  of  greater  capacity  than  was  the 
original  property  the  cost  of  reconstruction  shall  be  treated  as  follows: 

Debit — 

To  accounts  for  plant  and  equipment  (Nos.  200  to  270).  the  excess  cost 
of  the  property  as  reconstructed  over  the  cost  or  ledger  value  of  the  origi- 
nal property.  . 

To  account  No.  185,  "  Depreciation  reserve, "  the  amount  earned  there- 
in with  respect  to  the  property  reconstructed. 

To  account  No.  135,  "Materials  and  supplies,"  the  value  of  salvage 
recovered  from  original  property. 

To  accounts  for  operating  expenses  (Nos.  600, 610,  or  640),  the  remain- 
der of  the  cost  of  reconstruction. 
Credit — 
To  account  No.  115,  "Cash,"  or  other  appropriate  accounts,  the  cost  of 
reconstruction. 

When  it  is  necessary  substantially  to  reconstruct  or  to  replace  a  major  portion  of  any 
unit  of  property  or  any  important  section  of  a  continuous  structure,  the  cost  shall  be 
handled  through  the  plant  and  equipment  accounts;  that  is,  the  cost  of  the  property 
removed  or  replaced  shall  be  credited  to  the  appropriate  plant  and  equipment  accounts 
and  the  new  property  shall  be  charged  thereto.    (See  section  13,  following. ) 


12 

13.  Plant  and  equipment  retired. — When  any  plant  and  equipment  is  destroyed, 
withdrawn,  or  otherwise  retired  from  service  for  any  cauee,  the  coet  or  ledger  value  of 
the  property  retired  shall  be  written  off  as  follows: 

Debit- 
To  account  No.  185,   "Depreciation  reserve,'*  the  amoimt  carried 
therein  with  respect  to  the  property  retired. 

To  account  No.  135,  "Materials  and  supplies,"  the  value  of  salvage 
recovered  from  property . 

To  account  No.  640,  ^' Other  maintenance  expenses,"  the  remainder  of 
the  cost  or  ledger  value  of  property  and  the  expense  of  retirt^mont.     In 
case  an  important  piece  of  property  or  a  considerable  length  of  line 
is  destroyed,  withdrawn,  or  otherwise  retired  and  not  replace<l  by  other 
property,  the  charge  for  the  remainder  of  the  cost  or  ledger  value  and  the 
expense  of  retirement  shall  be  made  to  account  No.  195,  "Surplus,"  in- 
stead of  account  No.  640,  "Other  maintenance  expenfles." 
Credit — 
To  accounts  for  plant  and  equipment  (Nos.  200  to  290),  the  amounts 
theretofore  charged  to  such  accoimts  with  respect  to  such  property-. 

The  cost  of  the  property,  if  any,  installed  in  place  of  that  withdrawn  shall  be  charged 
to  plant  and  equipment  accounts  (Nos.  200  to  280). 

14.  Repairs.— The  term  repairs  as  used  in  the  texts  of  accounts  Nos.  600,  610,  and 
640  includes  the  following: 

(a)  Testing  for,  locating,  and  clearing  crosses,  breaks,  grounds,  and  other  line 
troubles,  including  routine  work  intended  to  prevent  such  troubles,  as,  for  example, 
pulling  up  slack,  tightening  guys  and  resettinff  guy  stubs,  trimming  trees,  straight^ 
ening  poles  and  cross  arms,  and  cleaning  and  adjusting  apparatus; 

(6)  Replacement  of  minor  or  shorMived  parts  of  stnictures,  equipment,  or  facilities; 

(c)  Replacement  of  minor  parts  of  wire  plant  or  equipment  when  made  necessarv 
by  faulty  adjustments,  excessive  strains,  mechanical  injuries,  or  other  minor  casual- 
ties; 

{d)  Rearrangement  and  changes  in  location  of  plant  (except  subscribers'  station 
eciuipment,  for  which  a  special  account  is  provided),  incluaing  rearrangement  of 
circuits,  reassociation  of  party  lines,  rearranging  grouping  of  trunks  and  calling  cir- 
cuits, recross  connecting  on  distributing  frames,  reninning  jumper  wires,  underlining 
switchboard  jacks,  etc.,  together  Avdth  materials  used  for  such  purposes  which  do  not 
add  to  the  tangible  value  of  such  plant; 

(e)  Recovering  salvage  and  removing  retired  or  abandoned  property  (except  sub- 
scribers' station  equipment)  in  connection  with  the  above  work. 

Such  repairs  are  not  intended  to  be  taken  intoaccountin  fixing  a  rate  of  depreciation. 

15.  Cost  of  repairs. — The  term  cost  of  repairs,  as  used  in  the  texts  of  the  various 
operating  expense  accounts,  should  be  understood  to  include  the  wages,  salaries 
and  fees  paid  employees  directly  engaged  in  the  work  of  repairs,  the  personal  expenses 
of  such  employees  when  borne  by  the  company,  the  cost  (including  transportation)  of 
materials  and  supplies  consumed,  and  the  expense  of  facilities  employed  in  making 
the  repairs,  less  the  value  of  any  salvage  recovered.  It  includes  also  the  cost  of  direct 
supervision,  such  as  by  foremen  or  superintendents  of  repair  gangs,  but  does  not 
include  the  salaries  and  expenses  of  general  officers  of  the  company, 

16.  Depreciation. — Depreciation  is  the  decline  in  value  of  tangible  property  and  is 
one  of  the  losses  of  the  company  properly  chargeable  to  Operating  Expenses. 
There  is  certain  wear  and  tear  taking  place  in  the  property  which  can  not  be  covered 
by  current  repairs,  and  in  addition  the  property  is  likely  to  become  obsolete  or  inade- 
quate 80  that  at  some  future  date  it  must  be  discarded  for  that  reason  and  replaced. 
In  order  to  provide  for  the  expense  when  the  property  is  taken  out  of  service  or  re- 
placed, charges  should  be  made  to  Operating  Expenses  to  provide  a  reserve  for  such 
purpose.  If  this  is  not  done  the  expense  of  replacing  must  be  charged  in  bulk  to 
Operating  Expenses  when  the  property  is  replaced,  which  would  cause  the  company 
to  show  low  operating  expense  in  years  when  no  reconstruction  takes  place  and  high 


\.      I      .  t 


4 


13 

operating  expense  in  years  when  reconstruction  is  {performed.    By  providing  depre- 
ciation charges  the  operating  expense  accoimts  will  diow  a  record  of  expenses  from 
year  to  year  more  in  harmony  with  true  conditions. 
The  expense  of  depreciation  may  consist  of — 

(a)  Losees  suffered  through  current  lessening  in  value  from  wear  and  t«ar  and  not 
covered  by  current  repairs;  for  example,  a  switchboard  may  be  kept  in  workable 
condition  by  current  repairs,  but  at  some  future  date  it  may  be  in  such  condition 
that  replacement  is  necessary. 

(6)  Obsolescence  pr  inadequacy  resulting  from  age,  new  inventions,  or  public 
requirements;  for  example,  substituting  common  battery  for  magneto  system,  auto- 
matic for  manual  system,  or  underground  for  overhead  construction. 

(c)  Losses  suffered  through  storms,  floods,  and  other  casualties. 

Charges  for  depreciation  should  be  based  on  a  rule  that  will  evenly  distribute  over 
Operating  Expenses  during  the  life  of  the  property  the  original  cost  (less  the  salvage). 
The  Commission  at  present  does  not  prescribe  the  rate  of  depreciation,  but  leaves  this 
matter  to  the  discretion  of  the  company. 

The  amounts  estimated  to  cover  depreciation  shall  be  charged  to  operating  expense 
account  No.  630,  "Depreciation  of  plant  and  equipment,"  and  credited  to  balance- 
sheet  account  No.  185,  "Depreciation  reserve,"  against  which  shall  be  charged,  to 
the  extent  that  such  charges  are  covered  by  the  reserve,  the  expense  of  reconstruction  or 
the  cost  or  ledger  value  of  property  when  retired.  (See  sections  12  and  13,  pages  11 
and  12.) 

It  is  not  required  that  a  special  fund  be  created  by  setting  aside  cash  or  other  assets 
out  of  the  general  funds  of  the  company  for  the  purpose  of  meeting  the  necessary 
expenditures  to  restore  the  property  when  reconstruction  becomes  necessary.  How- 
ever, this  may  be  done  if  desired,  in  which  case  the  fund  so  created  shall  be  carried 
in  account  No.  140,  "Special  funds." 


»        4 


.» 


i 


LIST  OF  ACCOUNTS 


For  Class  C  Companies. 


BALANCE  SHEET  ACCOUNTS. 

ASSET  SIDE. 

Page. 

100.  Plant  and  equipment 17 

105.  Other  property 17 

110.  Securities 17 

116.  Cash 17 


120.  Notes  receivable 

125.  Due  from  subscribers  and  agents. 

130.  Accounts  receivable 

135.  Materlvls  and  supplies 

140.  Speqal  funds 

146.  Prepaymbnts 


17 
17 
17 
17 
18 
18 


160.  Other  debit  accounts ig 


18 
18 
19 
19 
19 


LIABILITY  SIDE. 

IflO.  Capital  stock 

165.  Funded  debt 

170.  Notes  payable ^ 

175.  Accounts  payable 

180.  Accrued  liabilities  not  due 

185.  Depreciation  resIirve 19 

190.  Other  credit  accounts 19 

196.  Surplus x9 

PLANT  AND  EQUIPMENT  ACCOUNTS. 

800.  Intangibles 21 

210.  Land  and  buildings 21 

220.  Central  office  equipment 2I 

21 

21 

21 

22 

22 

22 

22 


230.  Station  equipment 

240.  Exchange  lines 

260.  Toll  lines 

260.  General  equipment 

270.  Undistributed  construction  expenditures 

280    Plant  and  equipment  purchased 

290.  Plant  and  equipment  in  service  January  1,  1915 


SSSIO**— 14- 


(15) 


16 

INCOME  ACCOUNTS. 

CREDITS. 

300.  Telephone  operating  revenues 23 

310.  Other  operating  revenues 23 

320.  Miscellaneous  income 23 

DEBITS. 

330.  Telephone  operating  expenses 23 

340.  Other  operating  expenses 23 

350.  Taxes 23 

360.  Interest  accrued • 24 

370.  Miscellaneous  charges  to  income 24 

380.  Dividends  declared 24 

OPERATING  REVENUE  ACCOUNTS. 

500.  Exchange  revenues 26 

510.  Toll  revenues 26 

520.  Miscellaneous  revenues 26 

530.  Licensee  revenues — Cr 26 

540.  Licensee  revenues — Dr 26 

OPERATING  EXPENSE  ACCOUNTS. 

600.  Repairs  op  wire  plant 27 

610.  Repairs  op  equipment 27 

620.  Station  removals  and  changes 27 

630.  Depreciation  of  plant  and  equipment 27 

640.  Other  maintenance  expenses 27 

650.  Operators'  wages 27 

660.  Other  traffic  expenses ^ 28 

670.  General  office  salaries 28 

680.  Other  general  expenses 28 


■ 


"^ 


\ 


TEXT  OF  BALANCE  SHEET  ACCOUNTS. 


For  Class  C  Companies. 


Asset  Side. 
100.  Plant  and  Equipment. 

This  account  shall  include  the  cost  of  all  property,  tangible  and  intangible, 

used  by  the  company  in  its  telephone  operations  and  operations  incident  thereto, 

at  the  date  of  the  balance  sheet. 

Note.— Separato  ledger  accounts  shall  be  provided  for  each  of  the  primary  plant  and  equipment 
accounts  (Nos.  300  to  290),  and  the  totals  of  the  balances  of  such  accounts  shall  be  carried  to  account 
No.  100  when  the  balance  sheet  is  prepared. 

105.  Other  Property. 

This  account  shall  include  the  cost  of  property  used  otherwise  than  in  tele- 
phone operations,  such  as  lighting,  water,  power,  or  manufacturing  plants;  the 
cost  of  lands  and  buildings  not  used  in  any  of  the  company's  operations;  and 
similar  in  vestments . 

110.  Securities. 

This  account  shall  include  the  cost  or  ledger  value  of  stocks,  bonds,  mortgages, 
and  other  evidences  of  indebtedness  (including  notes  due  and  payable  after  one 
year  from  date  of  issue)  held  by  or  for  the  company. 
1^  In  stating  this  account  on  the  balance-sheet  statement  the  par  value  of  securities 

issued  or  assumed  by  the  company  and  carried  in  this  account  shall  be  deducted, 
in  order  that  this  account  shall  show  only  the  cost  or  ledger  value  of  securities  of 
other  companies. 

116.  Cash. 

This  account  shall  include  the  amoimt  of  cash  and  other  current  funds  on 
hand  or  on  deposit  in  banks  or  with  trust  companies.  This  account  shall  also 
include  special  deposits  of  cash  for  payment  of  dividends  or  interest,  or  for 
other  purposes. 

120.  Notes  Receivable. 

This  account  shall  include  the  cost  or  ledger  value  of  all  notes,  drafts,  and  other 
evidences  of  money  receivable  on  demand  or  within  one  year  from  date  of  issue. 

125.  Due  from  Subscribers  and  Agents. 
^  This  account  shall  include  amounts  owing  to  the  company  by  subscribt^rs  and 

patrons  for  services  rendered  or  billed;  also  amounts  due  from  agents  and  othere 
authorized  to  collect  operating  revenues. 

130.  Accounts  Receivable. 

This  account  shall  include  the  amounts  owing  to  the  company  by  corporations, 
firms,  or  individuals  for  miscellaneous  bills  (other  than  those  covering  telephone 
and  incidental  services) ;  amounts  advanced  to  employees  for  working  funds;  divi- 
dends declared  by  others,  but  not  collected;  interest  due  and  collectible  on  securi- 
ties, mortgages,  accounts,  and  deposits;  and  other  items  of  amounts  collectible. 

135.  Materials  and  Suppues. 

This  account  shall  include  the  balances  representing  the  cost  of  materials  and 
supplies  on  hand. 

(17) 


l! 


18 

Chaige  thifl  account  with  the  coat  of  materials  and  supplies  purchased,  includ- 
ing transportation  charges.  Charge  also  to  this  account  the  salvage  value  of  mate- 
rials and  supplies  recovered  from  plant  retired  and  returned  to  stores. 

Credit  this  account  with  the  value  of  materials  and  supplies  when  used  or 
disposed  of  otherwise. 

Note. — When  materials  and  supplies  are  purchased  for  immediate  use,  they  need  not  be  carried 
through  this  account,  but  may  be  charged  directly  to  Plant  and  Equipment,  Operating  Expenses, 
or  other  accounts  affected. 

140.  Special  Funds. 

This  account  shall  include  the  amount  of  cash,  the  cost  or  ledger  value  of  securi- 
ties, and  other  assets  which  have  been  set  apart  and  are  held  in  depreciation 
funds,  sinking  funds,  insurance  fimds,  and  other  fimds  held  for  specific  purposes. 
In  stating  this  account  on  the  balance-sheet  statement  the  par  value  of  securi- 
ties issued  or  assumed  by  the  company  and  carried  in  this  accoimt  shall  be  de- 
ducted in  order  to  show  only  the  net  assets  in  the  funds  other  than  the  company's 
own  securities. 

145.  Prepayments. 

Charge  this  account  with  the  amount  of  rents,  taxes,  insurance,  directory  ex- 
penses, and  like  disbursements  made  in  advance  of  the  period  to  which  they  apply. 
As  the  periods  covered  by  such  prepayments  expire,  credit  this  accoigit  and  charge 
the  proper  operating  expense  or  other  accounts  with  the  amount  applicable  to 
the  period. 

150.  Other  Debit  Accounts. 

This  account  shall  include  all  debits  pertaining  to  the  balance  sheet  and  not 

provided  for  elsewhere,  including  debit  items,  the  final  disposition  of  which  ia 

uncertain.    This  account  shall  include  such  items  as  accrued  income  not  due, 

discounts  on  capital  stock,  discounts  on  bonds,  and  similar  items. 

Note.— The  entries  in  this  account  shall  be  made  in  sufficient  detail  to  permit  an  analysis  in  the 
reports  to  the  Interstate  Commerce  Commission  and  where  necessary  separate  subacooimts  shall  be 
provided. 

Liability  Side. 
160.  Capital  Stock. 

This  account  shall  include  the  total  par  value  of  outstanding  capital  stock. 
In  case  of  the  issue  of  two  or  more  classes  of  capital  stock,  such  as  common  and 
preferred,  a  subaccount  shall  be  provided  for  each  class.  If  capital  stock  is 
paid  for  in  installments,  stock  to  be  issued  when  fully  paid,  a  subaccount  en- 
titled ** Installments  on  capital  stock"  shall  be  provided,  to  which  shall  be 
credited  the  amounts  of  installments  received  by  the  company;  when  stock 
certificates  are  issued  to  stockholders  the  subaccount  shall  be  charged  and  the 
appropriate  capital  stock  subaccount  shall  be  credited. 

In  stating  this  account  on  the  balance-sheet  statement  the  par  value  of  stock 
held  by  the  company  in  its  treasury,  in  sinking  or  other  reserve  funds,  or  other- 
wise, shall  be  deducted,  in  order  that  this  account  shall  show  only  the  par  value 
of  stock  held  by  the  public.  ^ 

Note.— If  the  telephone  company  is  not  incorporated  but  is  operated  by  an  individual,  firm,  copart- 
nership, or  association,  accounts  No.  160,  "Capital  stock,"  and  No.  195,  "Surplus"  shall  be  omitted, 
and  in  lieu  thereof  an  account  entitled  "  Proprietor's  account"  shall  be  substituted. 

165.  Funded  Debt. 

This  account  shall  include  the  par  value  of  all  bonds,  notes,  mortgages,  receiver's 
certificates,  and  other  evidences  of  indebtedness  issued  or  assumed  by  the  com- 
pany and  which  are  not  due  and  payable  until  after  one  year  from  date  of  issue. 
In  case  of  the  issuance  of  two  or  more  classes  of  funded  debt  a  subaccount  shall 
be  provided  for  each  class. 


i 


I  • 


• 


19 

In  stating  this  account  on  the  balance-sheet  statement  the  par  value  of  funded 
debt  issued  or  assumed  by  the  company  and  held  by  it  in  its  treasury,  in  sinking 
or  other  reserve  funds,  or  otherwise,  shall  be  deducted,  in  order  that  this  account 
shall  show  only  the  par  value  of  funded  debt  held  by  the  public. 

170.  Notes  Payable. 

This  account  shall  include  the  par  value  of  all  notes,  drafts,  and  other  evidences 
of  indebtedness  issued  or  assumed  by  the  company,  and  which  are  payable  on 
demand  or  within  one  year  from  date  of  issue. 

175.  Accounts  Payable. 

This  account  shall  include  amounts  owing  to  other  companies,  firms,  and  indi- 
viduals and  not  includible  in  accounts  Nos.  165  and  170.  This  account  shall 
include  miscellaneous  bills  unpaid,  audited  vouchers  unpaid,  dividends  declared 
and  unpaid,  interest  due  and  unpaid,  and  similar  items. 

180.  Accrued  Liabilities  Not  Due. 

Credit  to  this  account  the  amounts  of  taxes,  interest,  rents,  and  other  expenses 
which  have  accrued  and  have  been  charged  to  operating  expense  or  other  accounts 
in  excess  of  the  amounts  actually  paid.  When  the  payments  become  due  this 
account  shall  be  charged  and  the  cash  or  other  accounts  affected  shall  be  credited. 

185.  Depreciation  Reserve. 

Credit  to  this  account  the  amounts  which  are  charged  monthly  or  annually  to 
operating  expense  account  No.  630,  "Depreciation  of  plant  and  equipment,"  to 
cover  the  depreciation  taking  place  in  plant  and  equipment. 

Charge  to  this  account,  when  any  plant  or  equipment  is  reconstructed  or 
retired,  the  amount  heretofore  credited  to  this  account  in  respect  of  the  property 
reconstructed  or  retired.    (See  sections  12  and  13,  pages  11  and  12.) 

190.  Other  Credit  Accounts. 

This  account  shall  include  all  credit  items  pertaining  to  the  balance  sheet  and 

not  provided  for  elsewhere,  including  credit  items  the  final  disposition  of  which 

is  uncertain.    This  account  shall  include  such  items  as  subscribers'  deposits, 

service  billed  in  advance,  premiums  on  capital  stock,  premiums  on  bonds,  and 

reserves  other  than  the  depreciation  reserve. 

Note. — The  entries  in  this  account  shall  be  made  in  sufficient  detail  to  permit  an  analysis  in  the 
reports  to  the  Interstate  Commerce  Commission  and  where  necessary  separate  subaccounts  shall  be 
provided. 

195.  Surplus. 

Under  this  head  on  the  balance-sheet  statement  shall  be  shown  the  balance  in 
the  surplus  account.  In  case  this  account  shows  a  debit  balance  it  shall  be 
shown  on  the  balance  sheet  in  red  ink.  The  surplus  account  is  the  difference 
between  the  total  assets  and  total  liabilities  and  shows  the  undivided  surplus 
or  the  deficit  of  the  company. 

The  net  income  (or  loss)  for  the  year  as  shown  by  the  Income  Account  shall  be 
transferred  to  this  account.  This  account  shall  also  be  credited  or  charged  with 
any  adjustments  affecting  the  asset  and  liability  accounts  and  any  miscellaneous 
gains  or  losses  which  are  not  attributable  to  the  operations  for  the  year  as  shown 
by  the  Income  Account. 

The  entries  to  this  account  shall  be  shown  in  such  detail  as  will  clearly  explain 

their  purposes  and  show  all  significant  fEicts  involved. 

Note. — If  the  telephone  company  is  not  incorporated  but  is  operated  by  an  individual,  firm,  coi>art- 
necship,  or  association,  accounts  No.  160,  "Capital  stock,"  and  No.  195,  "Surplus,"  shall  be  omitted, 
•nd  in  lieu  thereof  an  account  entitled  "  Proprietor's  account"  shall  be  substituted. 


i 


It 


\ 


.     , 


•  ^ 


\ 


TEXT  OF  PLANT  AND  EQUIPMENT  ACCOUNTS. 

For  Class  C  Companies. 


Gkneral  Note  Appucable  to  all  Plant  and  Equipment  Accounts.— Articles  of  small  value  or  of 
short  life,  or  articles  that  are  likely  to  be  lost  or  stolen,  shall  not  be  charged  to  the  plant  and  equip- 
ment  accounts  but  shall  be  charged  to  the  appropriate  operating  expense  accounts. 

200.  Intangibles. 

Charge  to  this  account  the  expense  of  organizing  the  company,  the  cost  of 
franchises  and  patent  rights,  and  the  cost  of  other  intangibles  obtained  by  the 
company  and  used  or  useful  in  the  operations  of  the  company. 

210.  Land  and  Buildings. 

Chaige  to  tliis  account  the  cost  of  land  (other  than  right  of  way)  and  buildings 
used  in  telephone  operations  and  operations  incident  thereto,  and  the  cost  of  all 
permanent  fixtures  to  such  buildings. 

220.  Central  Office  Equipment. 

Charge  to  tliis  account  the  cost  of  local  and  toll  switchboards  and  appurtenances, 
main  and  intermediate  frames,  relay  and  coil  racks,  interior  wires  and  cables, 
power  apparatus,  telephone  sets  used  in  the  operating  and  terminal  rooms,  and 
other  apparatus  in  the  operating  and  terminal  rooms;  also  the  cost  of  furniture 
and  fixtures  in  the  operating  and  terminal  rooms. 

230.  Station  Equipment. 

Charge  to  this  account  the  cost  of  equipment  and  apparatus  on  the  premises  of 
subscribers,  patrons,  and  others. 

This  account  shall  include  telephone  sets,  private  branch  exchanges,  booths 
and  fixtures,  inside  wiring,  and  other  apparatus,  and  the  cost  of  installation. 

This  account  shall  include  the  cost  of  telephone  sets  used  by  company's  em- 
ployees, other  than  those  in  the  operating  and  terminal  rooms  of  central  offices. 

240.   Exchange  Lines. 

Charge  to  this  account  the  cost  of  wire  plant  between  the  central  office  and 
the  premises  of  subscribers,  between  central  offices  and  pay  stations,  and  between 
two  central  offices  in  the  same  exchange  area. 

This  account  shall  include  the  cost  of  right  of  way,  poles,  underground  conduits, 

manholes,  wires,  cables,  and  fixtures. 

Note.— If  lines  are  used  for  both  exchange  and  toll  service,  the  cost  shall  be  charged  to  either 
account  No.  240  (»-  account  No.  250,  according  to  the  principal  use  made  of  the  lines. 

250.  Toll  Lines. 

Charge  to  this  account  the  cost  of  wire  plant  used  in  the  transmission  of  toll 
messages  between  offices  in  different  exchange  areas. 

This  account  shall  include  the  cost  of  right  of  way,  poles,  underground  con- 
duits, manholes,  wires,  cables,  and  fixtures. 

Note.— If  lines  are  used  for  both  exchange  and  toll  service,  the  cost  shall  be  charged  to  either 
account  No.  240  at  account  No.  250,  according  to  the  principal  use  made  of  the  lines. 

(21) 


22 


260.  General  Equipment. 

Charge  to  this  account  the  cost  of  automobiles,  wagons,  horses,  shop  machinery, 
toola  and  implements,  ofl&ce  furniture  and  fixtures  (other  than  in  operating 
rooms  and  terminal  rooms),  and  other  equipment  of  the  company  not  covered 
by  accounts  Noe.  220  and  230. 

270.  Undistributed  Construction  Expenditures. 

Charge  to  this  account  expenditures  made  in  the  construction  oi^cquisition 
of  plant  and  equipment  when  such  expenditures  can  not  be  assigned  to  anv  of 
the  accounts  Nos.  200  to  260. 

This  account  includes  expenditures  made  during  the  construction  period  for 
engineering  and  law  expenses,  taxes,  insurance,  interest,  and  other  incidental 
construction  items  which  can  not  properly  be  charged  to  any  other  plant  and 
equipment  account.  When  any  such  expenditure  can  be  assigned  to  any  spe- 
cific item  of  plant  or  equipment  it  shall  be  charged  to  the  account  appropriate 
for  such  specific  item. 

280.  Plant  and  Equipment  Purchased. 

When  a  going  or  completed  telephone  plant  is  purchased  or  constructed  under 
contract,  the  cost  thereof  shall  be  charged  to  this  account  until  such  time  as  a 
basis  may  be  determined  upon  for  distribution  of  the  cost  over  accounts  Nos  200 
to  270. 

290.  Plant  and  Equipment  in  Service  January  1, 1915. 

To  this  account  shall  be  charged  the  amounts  carried  in  the  company's  books 
on  January  1, 1915,  representing  the  plant  and  equipment  installed  prior  to  and  iu 
service  on  that  date,  until  such  time  as  it  is  possible  to  distribute  such  amounta 
over  accounts  Nos.  200  to  270. 


1 


'  « 


i 


TEXT  OF  INCOME  ACCOUNTS. 

For  Class  C  Companies. 


300.  Telephone  Operating  Revenues. 

This  account  shall  include  the  total  operating  revenues  derived  from  the  tele- 
phone operations  for  the  year.  To  this  account  shall  be  credited  the  total  of 
amounts  carried  in  the  priraar>'  o]>erating  revenue  accounts  (Nos.  500  to  540). 

310,  Other  Operating  Revenues. 

If  the  company  conducts  operations  other  than  telephone  operations,  such  as 
lighting,  water,  power,  or  manufacturing  plants,  the  revenues  accruing  from  such 
operations  shall  be  credited  to  this  account.  This  account  includes  the  revenues 
from  property  the  investment  in  which  is  carried  in  account  No.  105,  **  Other 
property." 

320.  Miscellaneous  Income. 

Credit  to  this  account  all  revenues  accruing  to  the  company  other  than  those 
obtained  through  telephone  or  other  operations.    This  account  shall  include— 
Interest  receivable  from  others  on  mortgages,  bonds,  notes  etc 
Dividends  receivable  from  other  companies  on  securities  owned 
Rents  receivable  from  plant  leased  to  others  and  not  used  in  part  by  the  com- 
pany in  Its  telephone  operations,  such  as  an  entire  exchange  system,  an 
important  secUon  of  pole  lines,  etc.  e     .y         »     * 

Other  similar  items  of  income. 

Charge  to  this  account  any  expenses  incurred  that  are  directly  assignable  to 
the  revenues  which  are  credited  to  this  account,  such  as  expense  of  maintenance 
of  plant  leased  to  others,  expense  of  procuring  interest  and  dividends  and 
similar  charges.  ' 

330.  Telephone  Operating  Expenses. 

This  account  shall  include  the  total  operating  expenses  of  the  telephone  opera- 
tions for  the  year.  To  this  account  shall  be  charged  the  total  amounts  carried 
in  the  primary  operating  expense  accounts  (Nos.  600  to  680). 

340.  Other  Operating  Expenses. 

If  the  company  conducts  operations  other  than  telephone  operations,  such  as 
Ughtmg,  water,  power,  or  manufacturing  plants,  the  expense  of  maintenance 
and  operation  shall  be  charged  to  this  account.  This  account  includes  the 
expenses  of  and  taxes  on  property  the  investment  in  which  is  carried  in  account 
No.  105,  "Other  property." 

350.  Taxes. 

Charge  this  account  with  the  amount  of  all  taxes  assessed  against  the  telephone 
property,  operations,  or  privileges  of  the  company.  Taxes  paid  in  advance  of 
the  period  to  which  they  apply  shall  be  charged  to  account  No.  145,  "Prepay- 
naents/'  and  as  the  term  expires  for  which  the  taxes  apply  this  account  shall  be 
charged  and  account  No.  145  shall  be  credited. 

Taxes  accrued  in  advance  of  their  actual  payment  shall  be  charged  to  this 
account  and  credited  to  account  No.  180,  "Accrued  liabilities  not  due  "  When 
payments  become  due  the  latter  account  shall  be  charged  and  the  cash  or  other 
accounts  affected  shall  be  credited. 

(23) 


Ill> 


24 

360.  Interest  Accrued. 

Charge  to  this  account  interest  on  bonds,  mortgagee,  notes,  and  other  interest- 
bearing  obligations,  and  interest  on  open  accounts.  No  interest  shall  be  charged 
on  securities  issued  or  assumed  by  the  company  and  held  by  or  for  it. 

370.  Miscellaneous  Charges  to  Income. 

Charge  to  this  account  all  expenses  accrued  or  payments  made  which  apply 
to  the  transactions  of  the  year  and  which  are  not  chargeable  to  Operating  Expenses 
or  to  the  preceding  income  debit  accounts.    This  account  shall  include — 

Rents  payable  for  plant  and  equipment  leased,  such  as  an  entire  exchange  sys- 
tem, an  imj)ortant  section  of  pole  lines,  etc.,  but  not  including  minor 
rents  which  are  provided  for  in  account  No.  680. 

Losses  not  properly  chargeable  as  operating  expense. 

Uncollectible  bills. 

Other  similar  items. 

380.  Dividends  Declared. 

Charge  this  account  with  the  amounts  of  dividends  declared  on  outstanding 
capital  stock  of  the  company.  If  a  dividend  is  payable  in  anything  other  than 
money,  such  tiling  shall  be  fully  described  in  the  entrj-.  No  dividends  shall  be 
charged  on  capital  stock  issued  by  the  company  and  held  by  or  for  it. 


TEXT  OF  OPERATING  REVENUE  ACCOUNTS. 

For  Class  C  Companies. 


i 


600.  Exchange  Revenues. 

Credit  to  this  account  all  revenues  accrued  from  the  transmission  of  local  mes- 
sages within  the  same  exchange  area.  An  exchange  area  is  the  area  referred  to  and 
usually  described  in  contracts  with  subscribers  as  that  within  which  local  service 
is  fiuniished  at  rates  specified  in  such  contracts.    This  account  shall  include — 

Rentals  from  subscribers  for  local  and  rural  service. 

Rentals  from  private  branch  exchanges. 

Charges  for  extension  stations  and  extension  bells. 

Chaises  for  extra  mileage  in  circuits  to  subscribers'  stations. 

Chaises  for  extra  directory  insertions. 

Installation  and  cancellation  charges  when  billed  against  subscribers. 

Revenues  from  public  pay  stations  for  calls  within  the  exchange  area. 

Charges  for  switching  calls  for  farmer  lines. 

Rents  from  attachments  to  exchange  poles,  and  other  rents  for  exchange 

property. 
Otner  revenues  accruing  from  exchange  operations. 

Charge  to  this  account  discounts  allowed  to  subscribers  for  prompt  payment, 
corrections  of  overcharges,  authorized  refunds  on  account  of  failures  in  transmis- 
sion, and  other  corrections  affecting  exchange  revenues. 

510.  Toll  Revenues. 

Credit  to  this  account  all  revenues  derived  from  the  transmission  of  messages 
between  points  in  different  exchange  areas.    This  account  shall  include — 

Revenues  from  messages  transmitted  wholly  over  the  company's  lines  be- 
tween points  in  different  exchange  areas,  whether  from  subscribers  or  pay 
stations. 

Company's  proportion  of  revenues  on  messages  transmitted  partly  over  the 
company's  Imes  and  partly  over  lines  of  other  companies  (sometimes 
termed  mileage). 

Commissions  allowed  the  company  by  others  for  switching  or  handling  toll 
messages  within  the  exchange  area  or  for  originating  such  messages. 

R^nts  from  toll  lines  leased  to  brokers  or  others,  including  telegraph  com- 
panies. 

Rents  from  attachments  to  toll  poles,  and  other  rents  from  toll  property. 

Other  revenues  accruing  from  toll-line  operations. 

Charge  to  this  account  corrections  of  overcharges,  authorized  refunds  on 
account  of  failures  in  transmission,  and  other  corrections  affecting  toll  revenue. 

620.  Miscellaneous  Revenues. 

Credit  to  this  accoimt  all  revenues  accrued  from  telephone  operations  other 
than  those  provided  for  in  accounts  No.  500,  "Exchange  revenues,'*  and  No.  510, 
. ' '  Toll  revenues . ' '    This  account  shall  include— 

Revenues  from  messenger  service. 

Revenues  from  advertisements  in  directories. 

Charges  to  telegraph  companies  for  making  collections  and  for  other  services 

(not  transmission  charees). 
Rents  from  propertv  used  in  part  in  the  company's  telephone  operations  other 

than  tbbse  provided  for  in  accounts  Nos.  500  and  510,  such  as  rent  of  offices, 

storerooms,  and  teams. 
Profit  on  sales  of  materials  and  supplies. 
Other  miscellaneous  operating  revenues. 

(25) 


I 


26 

530.  Licensee  Revenues — Cr. 

Wlien  a  telephone  company  grants  to  another  telephone  company  the  use  of  its 
patents  or  furnishes  instruments  and  equipment  and  general  supervision  under 
an  agreement  for  apportioning  the  revenues  of  the  licensee,  the  proportion  accru- 
ing to  the  licensor  shall  be  credited  by  the  licensor  in  this  account. 

540.  Licensee  Revenues — Dr. 

When  a  telephone  company  is  granted  by  another  telephone  company  the  UM 
of  its  patents,  or  is  furnished  instruments  and  equipment  and  general  supervision 
under  an  agreement  for  apportioning  the  revenues  of  the  licensee,  the  proportion 
accruing  to  the  licensor  shall  be  charged  by  the  licensee  in  this  account. 


f 


►  f 


1 


TEXT  OF  OPERATING  EXPENSE  ACCOUNTS. 

For  Class  C  Companies. 


600.  Repairs  of  Wire  Plant. 

Charge  to  this  account  the  cost  of  repairs  of  all  exchange  wire  plant  and  toll  wire 
plant,  such  as  poles,  conduits,  manholes,  wires,  cables,  and  fixtures.  (See  section 
14,  page  12.) 

610.  Repairs  of  Equipment. 

Charge  to  this  account  the  cost  of  repairs  of  central  office  equipment  and  station 
equipment,  whether  in  the  central  office  operating  rooms  and  terminal  rooms  or  on 
subscribers'  premises,  such  as  switchboards,  main  and  intermediate  frames,  relay 
and  coil  racks,  interior  wires  and  cables,  power  apparatus,  telephone  sets,  private 
branch  exchanges,  and  booths  and  fixtures;  also  furniture  and  fixtures  in  central 
office  operating  and  terminal  rooms.    (See  section  14,  page  12.) 

(J20.  Station  Removals  and  Changes. 

Charge  to  this  account  the  cost  of  removing  or  changing  the  location  of  station 
equipment. 

When  stations  are  removed  (not  merely  changed  in  location)  the  original  cost 
of  the  instruments  and  the  cost  of  installation  (estimated  if  not  known)  shall  be 
credited  to  account  No.  230,  *'  Station  equipment";  the  value  of  the  instruments 
and  other  material  recovered  shall  be  charged  to  accoimt  No.  135,  "  Materials  and 
supplies";  and  the  cost  of  removing,  the  original  installation  cost,  and  any  loss 
of  material,  such  as  the  cost  of  interior  wire  not  recovered,  shall  be  charged  to  this 
account. 

When  stations  are  clianged  from  one  location  to  another,  charge  this  account 
with  the  cost  of  moving.  Credit  this  account  with  amounts  charged  to  sub- 
scribers for  moves  and  changes. 

630.  Depreciation  of  Plant  and  Equipment. 

Charge  to  this  account  monthly  or  annually  the  estimated  amount  of  deprecia- 
tion accruing  in  the  plant  and  equipment.     (See  section  16,  page  12.) 

640.  Other  Maintenance  Expenses. 

Charge  to  this  account  the  cost  of  repairs  of  land,  buildings  and  fixtures,  auto- 
mobiles, wagons,  tools  and  implements,  and  office  furniture  and  fixtures;  also  other 
maintenance  expense  not  provided  for  in  the  repair  accounts.  (See  section  14, 
page  12.) 

WTien  any  plant  or  equipment  is  destroyed,  withdrawn,  or  otherwise  retired 
from  service  for  any  cause  this  account  shall  be  charged  with  such  portion  of  the 
cost  or  ledger  value  of  such  property  (less  salvage)  as  has  not  been  provided  for 
in  account  No.  185,  *' Depreciation  reserve."    (See  section  13,  page  12.) 

650.  Operators'  Wages. 

Charge  to  this  account  the  pay  of  chief  operators,  supervisoss,  local  and  toll 
switchboard  operators,  information  operators,  and  all  other  operators  employed  in 
central  offices;  also  pay  of  operators  at  pay  stations. 

(27) 


28 

660.  Other  Traffic  Expenses. 

Charge  to  this  account  the  cost  of  power  purchased,  cost  of  labor  and  supplies  iu 
operating  power  plant,  cost  of  renewing  batteries,  pay  and  expenses  of  messen- 
gers, and  other  expenses  in  connection  with  the  operations  of  central  offices  and 
public  pay  stations. 

670.  General  Office  Salaries. 

Charge  to  this  account  the  salaries  of  general  officers  of  the  company  and  the 
salaries  of  other  officers  and  employees  whose  salaries  are  not  chargeable  to  any 
of  the  preceding  expense  accounts. 

680.  Other  General  Expenses. 

Chaise  to  this  account  all  general  expenses  other  than  general  office  salaries. 
This  account  shall  include  the  cost  of — 

Office  supplies  and  exj)en8e8. 

Stationery  and  printing  (including  postage). 

Traveling  and  incidental  expenses  of  general  officers  and  employees  of  gen- 
eral ofhces. 

Advertising. 

Preparing,  printing,  and  distributing  directories. 

Pay  station  commissions. 

Rents  for  general  offices  and  central  offices,  pole  attachments,  and  other  minor 
rents,  not  including  those  paid  for  lease  of  entire  telephone  plants.  (See 
account  No.  370.) 

Insurance. 

Law  expenses. 

Accidents  and  damages. 

Other  general  expenses. 

Note.— The  entries  in  this  account  shall  be  made  in  siitflcient  detail  tu  permit  an  analysis  in  th« 
reports  to  the  Interstate  Commerce  Commission. 


^  • 


INDEX  TO  THE  SYSTEM  OF  ACCOUNTS. 
Roman  numerals  refer  to  the  general  instructions;  Arabic  numerals  to  the  several  accounts. 


Abandoned  property.    (See  Retired  property.) 

Accidents,  expense  due  to,  680.  (See  also  Casual- 
ties.) 

Accounting  expense,  viii. 

Accounts;  accounts  receivable  balances,  130;  inter- 
est receivable  on,  130;  accounts  payable  balances, 
175;  interest  payable  on,  360. 

Accrued  liabilities  not  due;  liability  balances,  180; 
tax  credits  and  charges,  3^. 

Adjustments  of  balance-sheet  accounts,  195. 

Advances.    (See  Prepayments.) 

AdvMtising;  revenue  from  directory  advertising, 
620;  expense  for,  680. 

Agents,  balances  due  from,  125. 

Attachments  to  poles;  rent  receivable  from,  500, 510; 
rent  payable  for,  680. 

Automobiles;  investment,  260;  repair  expense,  640. 

Balance  sheet;  definition,  iv;  account8, 100-195. 

Bank  deposits,  asset  balances  of,  115. 

Battery  renewal  expense,  660. 

Bells,  extension,  revenue  from,  500. 

Bills;  accounts  receivable  balances,  130;  accounts 
peyable  balances,  175;  income  charges  for  uncol- 
lectible bills,  370. 

Bonds;  asset  balances  for  bonds  owned,  110;  bond 
discount  balances,  150;  funded  debt  liability,  165; 
bond  premium  balances,  190;  interest  receivable 
on,  320;  interest  payable  on,  360. 

Booths  and  fixtures;  investment,  230;  repair 
expense,  610. 

Brokers'  leased  lines,  rents  receivable  from,  510. 

Buildings;  cost  of  restoration  when  deteriorated, 
xii;  investment  not  used  for  telephone  op«-a- 
tlons,  105;  investment  used  for  telephone  opera- 
tk>ns,  210;  repair  expense.  640. 


Cables;  reoonstructk>n  costs,  xii;  interior  cable 
investment,  220;  outside  cable  investment,  240, 
250;  outside  cable  repairs,  600;  interior  cable 
repairs,  610. 

CanceUatfon  charges,  revenue  from,  500. 

Capital  stock;  disooant  balances  on,  150;  liability 
balances,  160. 

Guh;  current  balances,  115;  cash  in  special  funds, 
140. 

Ossualties;  reoonstructbn  costs  due  to,  xii;  repair 
costs  due  to,  xiv;  depreciatk>n  charges  due  to,  xvi. 

Central  offices;  equipment  investment,  220;  equip- 
ment repairs,  610;  pay  of  operators,  650;  other 
trafBo  exposes,  660;  rents  payable  for,  680. 

Changes;  of  plant  location,  xiv;  of  subscribers  sta- 
tions,  620. 

Chief  operators,  pay  of,  650. 

Circuit  rearrangements  included  in  repairs,  xiv.       | 

(29) 


Classes  of  telephone  companies,  i. 

Classifications  of  accovmts;    application  of,  i;  list 

of,ii. 
Cleaning  apparatus,  repair  charges  for,  xiv. 
Clearing  line  troubles,  repair  charges  for,  xiv. 
Coil  racks;  investment,  220;  repair  expense,  610. 
Collections;  expense  for  revenue  collection,  viii; 

revenue  from  telegraph  collections,  520. 
Commissions;  received  from  switching  and  handling 

toll  messages,  510;  paid  in  connection  with  pay 

stations,  680. 
Conunon  stock  liability,  160. 
Conduits;   reconstruction   costs,   xii;   investment, 

240,  250;  repair  expense,  600. 
Construction.    (See  Plant  and  equipment.) 
Cost,  definitions  of,  ix,  xv. 
Cross  arms,  repair  charges  for  straightening,  xiv. 

Damages;  charges  assignable  to  reconstruction, 
xii;  charges  assignable  to  operating  expense,  080. 

Debt.    (See  Accounts,  Funded  debt,  Notes.) 

Deficit  from  operations,  195. 

Deposits;  current  and  special  deposit  balances,  115; 
interest  receivable  on,  130;  subscribers'  deposit 
balances,  190. 

Depreciation;  definition  and  accounting,  xvi;  de- 
preciation fund  assets,  140;  depreciation  reserse 
liability,  185;  charges  to  operating  expense,  630. 

Directories;  prepaid  expense  balance,  145;  revenue 
from  extra  insertions,  500;  revenue  from  adver- 
tisements, 520;  preparing,  printing,  and  distrib- 
uting, 680. 

Discoimts;  asset  balances  on  securities  sold,  150; 
allowances  to  subscribers  for  prompt  pajTnent, 
500. 

Distributing  frames,  repair  charges  for  work  on,  xiv. 

Dividends;  deposits  to  meet  payments,  115;  imcol- 
lected  balances  of  dividends  receivable,  130;  un- 
paid balances  of  dividends  declared,  175;  incomi 
credits  for  dividends  receivable  and  debits  for 
collection  expense,  320;  income  debits  for  divi- 
dends declared,  380;  dividends  disallowed  on 
company  stock  owned,  380. 

Drafts;  drafts  receivable  balances,  120;  drafts  pay- 
able balances,  170. 


Employees.  (See  Pay,  Personal  expenses.) 
Engineering  expenses  assignable  to  investment,  270. 
Equipment;  repair  charges  for  minor  replacements, 
xiv;  investment  for  central  offices,  220;  invest- 
ment for  stations,  230;  general  equipment  invest- 
ment, 260;  revenue  credits  and  debits  for  use  by 
licensee,  530, 540;  repair  expense  for  central  offices 
and  stations,  610;  repair  expense  for  general  equip- 
ment, 640.    (See  also  Plant  and  equipment.) 


30 


1 


Exchange  area;  definition  of,  500;  revenue  from  ex- 
change service  in,  500;  revenue  from  toll  switching 
and  handling  in,  510. 

Exchange  lines;  investment,  240,  240  note;  repair 
expense,  600. 

Exchange  revenues,  credits  and  debits  to,  500. 

Exchange  systems;  allocation  of  items  to,  ill;  defi- 
nition of,  ili;  rents  receivable  from  lease,  320;  rents 
payable  for  lease,  370. 

Expenses.  (See  Operating  expenses.  Personal  ex- 
penses.) 

Extension  stations  and  bells,  revenue  from,  500. 

Extraordinary  repairs  considered  as  reconstruc- 
tion, xii. 

Fanner  lines,  revenue  from  switching  for,  500. 

Fees;  inclusion  in  cost  of  labor,  ix;  inclusion  in  cost 
of  repairs,  xv. 

Fire  damage,  reconstruction  charges  to  cover,  xii. 

Fixed  capital  accounts.  (See  Plant  and  equip- 
ment.) 

Fixtures;  buildings  fixtures,  210, 640;  operating  and 
terminal  room  fixtures,  220,  610;  booth  fixtures, 
230,  610;  line  fixtures,  240,  250,  600;  office  fixtures, 
260,  640. 

Flood  damage,  reconstruction  charges  to  cover,  xii; 
depreciation  charges  for,  xvi. 

Foremen  of  repair  gangs,  pay  of,  xv. 

Frames;  repair  charges  for  work  on  distributing 
frames,  xiv;  investment  in  main  and  Intermediate 
frames,  220;  repair  expense  on  main  and  interme- 
diate frames,  610. 

Franchise  costs  assignable  to  investment,  200. 

Fimded  debt;  liability,  165;  interest  payable  on,  360. 

Fimds;  special  depreciation  funds  unrequired,  xvi; 
advances  for  working  funds,  130;  special  ftmd 
balances,  140. 

Furniture;  in  operating  and  terminal  rooms,  230, 
610;  in  offices,  260, 640. 

General  equipment;  investment,  260;  repair  ex- 
pense, 640. 

General  expenses;  for  salaries,  670;  other  than  for 
salaries,  680. 

General  officers;  i>ay  of,  670;  traveling  and  incidental 
expenses  of,  680. 

General  offices;  pay  of  office  force,  670;  supplies  and 
expenses,  680;  traveling  and  incidental  expenses 
of  office  force,  680;  rents  payable  for,  680. 

Guys  and  guy  stubs,  repair  charges  for  work  on,  xiv. 

Horses;  investment  in,  260;  revenues  from  rent  of 
teams,  520. 

Implements.    (See  Tools.) 

Inadequacy,  depreciation  charges  due  to,  xvi. 

Income;  deflinition  of  accoimts,  vi;  annual  closing 
of  accounts,  vi;  accrued  income  balances  not  due, 
150;  accrued  income  charges  not  due,  180;  net  in- 
come closed  into  surplus,  lyS;  operating  income, 
300, 310;  miscellaneous  income,  320;  charges  against 
income,  330-380. 

Information  operator,  pay  of,  650. 

Inspection  cost  included  in  cost  of  matMiab  and 
supplies,  ix. 

Installation  of  stations;  costs  charged  to  investment, 
230;  revenue  credits,  5<X);  original  cost  charges  to 
operating  expense  at  removals,  620. 


Installments  received  on  capital  stock,  liability  for, 
160. 

Instruments;  licensee  revenue  accruals  for  use,  530, 
540;  removals  and  changes,  620.  (See  also  Sta- 
tions, Telephone  sets.) 

Insurance;  fimd  assets,  140;  prepayment  balances, 
145;  charges  to  investment,  270;  charges  to  opent- 
ing  expense,  080. 

Intangibles,  investment  charges  for,  200. 

Interest;  deposits  to  meet  payments,  115;  uncol- 
lected balances  of  interest  receivable  130;  unpaid 
balances  of  interest  payable,  175;  accrued  balances 
<rf  Interest  payable,  180;  charges  to  investment, 
270;  income  credits  for  interest  receivable  and 
debits  for  collection  expense,  320;  income  debits 
for  interest  payable,  360;  interest  disallowed  on 
company  securities  owned,  360. 

Investment;  accounts  provided  for,  v;  balances  for 
100, 105, 110;  plant  and  equipment  accounts,  200- 
290. 

Jacks,  repair  charges  for  underlining,  xiv. 
Jumper  wires,  repair  charges  for  rerunning,  xiv. 

Labor  cost,  definition  of,  ix. 

Land;  not  used  in  telephone  operations,  106;  other 
than  right  of  way,  210;  right  of  way,  240,  250;  re- 
pair expense,  640. 

Law  e.xpense;  assignable  to  investment,  270;  assign- 
able to  operating  expense,  680. 

Leased  propw-ty;  rents  from  and  maintenance  ex- 
pense for  plant  leased  to  others,  320;  rents  payable 
for  plant  leased  from  others,  370;  revenues  from 
lines  leased  to  brokers  and  others,  510.  (See  also 
Rents.) 

Licensee  revenue;  credits,  530;  debits,  540. 

Lighting  plants  not  used  in  telephone  operations; 
investment^  105;  revenues,  310;  maintenance  and 
operation,  340. 

Lines;  investment  in  exchange  lines,  240;  invest- 
ment in  toll  lines,  250;  revenue  from  extra  mileage 
charges,  500;  revenue  from  brokers'  and  others' 
leased  lines,  510;  repair  expense,  600.  (See  also 
Pole  line.) 

Local  service  revenue  from  exchanges,  fiOO. 

Losses;  miscellaneous  losses  not  assignable  to  in- 
come, 195;  net  loss  carried  from  income,  195;  losses 
assignable  to  income,  370;  loss  of  material  at  re- 
moval of  stations,  620. 

Machinery,  shop,  investment  in,  260. 

Maintenance;  debits  at  property  retirement,  xiii, 
640;  of  plant  leased  to  others,  320;  of  property  not 
used  in  telephone  operations,  340;  of  property 
used  in  telephone  operations,  60(M4O. 

Manholes;  Investment,  240,  250;  reprir  expense, 
600. 

Manuliactaring  plants;  investment,  106;  revenues, 
310;  maintenance  and  operation,  340. 

Materials  and  supplies;  definition  of  cost,  ix;  inclu- 
sion in  cost  of  repairs,  xv;  asset  balances,  135;  ac-- 
connting  for,  135, 136  note:  profits  from  sales,  520. 
(See  alao  Salvage.) 

Message  sOTvlce;  exchange  revenues,  500;  toll  reve- 
nues, 510. 

Messengers;  messenger  ser>'{ce  revenue,  520;  pay 
and  expenses,  UiO. 


31 


I 


.» 


i 


lOlsage;  charges  for  siibscribers'  extra  mileage,  500; 
mileage  payments  from  other  companies,  510, 

MisceUaneoas  chaiges  to  Income,  370. 

Miscellaneous  Income,  320. 

lOaoeUaneous  revenues,  520. 

Mortgagoe;  asset  balances  for  mortgages  owned,  IIC; 
interest  raoeivable  on,  130,  320;  mortgage  liabil- 
ity, 165;  interest  payable  on,  360. 

Notes;  asset  balances  for  notes  owned,  110,  120; 
note  liability,  165, 170;  interest  receivable  on,  320; 
interest  payable  on,  360. 

Obsolescence,  depreciation  due  to,  xvi. 

Officers;  pay,  670;  traveling  and  incidental  ex- 
penses, 680. 

Offices;  ftimiture  and  fixtures  investment,  260; 
revenue  from  rents  of,  520;  furniture  and  fixtures 
repairs,  640;  supplies  and  expenses,  680;  rents 
payable  for,  680.    (See  also  Central  offices.) 

Operating  exi>enses ;  allocation  of  items  to  exchange 
and  toll  service,  iii;  definition,  viii;  transfer  of 
totals  to  income,  viii;  charges  prepaid,  145; 
diarges  representing  accrued  liability,  180; 
charges  for  minor  articles  of  plant  and  equipment, 
general  note  (p.  21);  income  debits  for  expenses, 
330,  340;  maintenance  expense,  600-640;  traffic 
expense,  6iX),  660;  general  expaise,  670,  680. 

Operating  revenues;  allocation  of  items  to  exchange 
and  toll  service,  iii;  definition,  vii;  transfer  of 
totals  to  income,  vii;  due  from  agents  and  others, 
125;  income  credits  for  revenues,  300,  310;  mes- 
sage revenue,  500,  510;  miscellaneous  revenue, 
620;  licensee  revenue,  630,540. 

Operating  room  equipment;  investment,  220;  re- 
pair expense,  610. 

Operators*  wi^es,  650. 

Organization  expense  included  in  investment,  200. 

Other  property;  asset  balances,  105;  revenues  from, 
310;  expenses  for,  340. 

Overcharge  corrections,  500. 510. 

Patents;  costs  charged  to  investment,  200;  revenue 
debits  and  credits  for  use  by  licensees,  530,  540. 

Pay;  of  operating  officers  and  employees  assigned 
to  construction,  ix;  inclusion  in  cost  of  repairs, 
XV ;  of  central  office  and  pay  station  operators 
<160;  of  general  and  other  officers  and  employees, 
•70. 

Pay  stations;  revenue  from,  600;  pay  of  operators, 
WO;  other  traffic  expenses,  660;  commissions  in 
connection  with,  680. 

Personal  expenses;  Inclusion  in  Investment  cost  of 
labor,  Ix;  Inclusion  in  cost  of  repairs,  xv;  assign- 
able to  general  opo^ting  expense,  680. 

Plant  and  equipment;  allocation  of  items  to  ex- 
change and  toll  service,  iii;  definition  of  accounts, 
v;  definitions  of  plant  and  equipment  costs,  Ix; 
accounting  for  property  In  service  Jan.  1,  1915,  x' 
290;  charges  for  new  property,  xi;  accounting  for 
reconstruction,  xii;  accounting  for  retirements, 
xUi;  asset  balances,  100;  exclusion  of  minor  prop- 
erty items,  general  note  (p.  21);  distributed  ex- 
penditures, 200-260;  undistributed  expenditures, 
270;  clearing  accounts,  280,  290;  depreciation 
charges,  630. 


Pole  line;  reconstruction  costs,  xii;  rent  receivable 
for  leased  portions,  320;  rent  payable  for  leased 
portions,  370.    (See  also  Lines.) 

Poles;  repair  charges  for  straightening,  xiv;  invest- 
ment, 240,  250;  rents  receivable  from  attach- 
ments, 500, 510;  repair  expense.  600;  rents  paya- 
ble for  attachments,  680. 

Postage  included  in  general  operating  expense,  680. 

Power  plant  (not  for  telephone  operation);  invest- 
ment, 105;  revenues,  310;  maintenance  and  opera- 
tion, 340. 

Power  plant  (telephone  operation);  power  appara- 
tus investment,  220;  power  apparatus  repairs, 
610;  cost  of  power  purchased,  660;  cost  of  power 
plant  operation,  660. 

Preferred  stock  liability,  160. 

Premium  on  securities  sold,  liability  for,  190. 

Prepayments;  asset  balances,  145;  tax  charges  and 
credits,  350. 

Printing  included  in  general  operating  expense,  680. 

Private  branch  exchanges;  investment,  230;  reve- 
nue from  rentals,  500;  repair  expense,  610. 

Privileges,  taxes  on,  350. 

Profit  and  loss.    (See  Surplus  account.) 

Property.  (See  Other  property,  Plant  and  equip- 
ment.) 

Proprietor's  account  in  balance  sheet,  160  note,  195 

note. 
Purchased  plant  and  equipment,  280. 
Purchased  power,  cost  of,  660. 

Racks,  relay  and  coil;  investment,  220;  repair  ex- 
pense, 610. 

Rearrangement  of  plant,  repair  charges  for,  xiv. 

Reassociation  of  party  lines,  repair  charges  for,  xiv. 

Receivers'  certificates,  liability  for,  165. 

Reconstruction;  definition  and  accounting,  xii; 
charges  against  depreciation^reserve,  xvi,  185; 
special  funds,  xvi. 

Refunds;  of  exchange  revenues,  500;  of  toll  reve- 
nues, 510. 

Relay  racks;  investment,  220;  repair  expense,  610. 
Relocation  of  plant;  inclusion  in  repair  expense, 

xiv;  changes  of  stations,  620. 
Rentals  from  exchange  service,  500. 
Rents  (payable);  asset  balances  of  prepayments,  145; 

unpaid  accrual  balances,   180;  for  plant  leased 

from  others,  370;  included  in  operating  expense 

680. 

Rents  (receivable);  from  plant  leased  to  others,  320; 
from  pole  attachments,  500,  610;  from  exchange 
property,  500;  from  toU  property,  510;  from  offi- 
ces, storerooms,  teams,  etc.,  520. 

Repairs;  extraordinary  repairs  classed  as  recon- 
struction, xii;  accounting  for  current  repairs, 
xiv;  definition  of  repair  costs,  xv;  wire  plant 
repairs,  600;  equipment  repairs,  610;  repairs  of 
land,  buUdlngs,  and  general  equipment,  640. 

Replacements;  of  major  or  important  portions  of 
property,  xii;  of  minor  parts,  xiv. 

Reserve  fimds;  reconstruction  funds  unrequired 
xvi;  fund  assets,  140. 

Reserves;  charges  to  depreciation  reserve  at  recon- 
struction, xii;  charges  to  depreciation  reserve  at 
retirements,  xiii;  depreciation  reserve  liability 
xvi,  185;  reserve  liability  other  than  for  deprecia- 
tion, 190. 


32 


!| 


Retired  property;  cost  of  removal  for  reconstruc- 
tion, xii;  accounting  for  retirement,  xiil;  cost  of 
removal  for  repairs,  xtv;  charges  to  depreciation 
reserve,  185;  charges  to  operating  expense,  640. 

Revenues .    ( See  Operat  tag  revenues . ) 

Right  of  way  tavestment;  for  exchange  Itaes,  240; 
for  toU  Imes,  250. 

Rural  service,  revenue  from,  500. 

Salaries.    (See  Pay.) 

Salvage;  recovery  cost  at  reconstruction,  xii;  debits 
to  materials  and  supplies  at  reconstruction,  xii; 
debits  to  materials  and  supplies  at  retirements, 
xiii,  135;  recovery  cost  at  repairtag,  xiv;  salvage 
deduction  from  cost  of  repairs,  xv. 

Securities  owned;  asset  balances  for  securities 
owned,  110;  interest  receivable  on,  130;  asset 
balances  for  securities  m  special  funds,  140;  in- 
come from  securities  owned,  320;  taterest  dis- 
allowed on  company  securities  owned,  3fiO;  divi- 
dends disallowed  on  company  stock  owned,  380. 

Service  billed  in  advance,  liability  for,  190. 

Shop  machmery,  tavestment  ta,  260. 

Smktag  funds.    (See  Reserve  funds.) 

Special  deposits,  cash  balances  ta,  115. 

Special  funds;  depreciation  fund  unrequired,  xvi; 
fund  assets,  140. 

Stationery  tacluded  ta  general  operating  expense, 
680. 

Stations;  tavestment  ta  station  equipment,  230; 
exchange  revenue  from,  500;  repair  expense,  610; 
removals  and  changes,  620.  (See  also  Instru- 
ments, Telephone  sets.) 

Stocks;  asset  balances  for  stocks  owned,  110;  stock 
discount  balances,  150;  capital  stock  liability,  160; 
stock  premium  balances,  190;  dividends  receiv- 
able on,  320;  dividends  payable  on,  380. 

Storerooms,  revenue  from  rent  of,  520. 

Storm  damage,  reconstruction  cliarges  to  oover,  xii; 
depreciation  charges  for,  xvi 

Subscribers;  balances  due  from,  125;  liability  for 
deposits  of,  190;  tavestment  ta  subscribers'  sta- 
tion equipment,  230;  revenue  from  rentals  and 
charges  paid  by,  500;  repcdrs  to  subscribers'  sta- 
tion equipment,  610. 

Supertatendents  of  repair  gangs,  pay  of,  xv. 

Supervision;  taclusion  ta  operating  expenses,  viii; 
taclusion  ta  cost  of  repairs,  xv;  services  covered  by 
licensee  agreements,  530,  540;  pay  of  supervisor 
operators,  650. 

Supplies;  for  power  plant  operation,  660;  for  offices, 
680.    (See  also  Materials  and  supplies.) 

Surplus  account,  balances  ta,  195. 


Switchboaids;  inTwtnunt,  230;  repair  expouM,  610; 

wages  of  operaton,  65a 
Switching  revenues;  exchange  switching  for  fanner 

Itaes,  500;  Bwitchtag  of  toll  messages,  510. 

Taxes;  asset  balances  of  prepayments,  145;  unpaid 
accrual  balances,  180;  taxes  assignable  to  invest- 
ment, 270;  on  property  not  used  tn  telephone 
(^teratioDs,  340;  on  telephcoe  property,  opera- 
tions, and  privileges,  350. 

Teams,  revenue  from  rent  of,  520. 

Telegraph  companies;  rents  from  lines  leased  to^ 
510;  charges  for  coUaotiflBa  made  for,  520. 

Telephone  seta;  inveatmant  In  central  office  sets, 
220;  investment  in  station  sets,  230;  repair  ex- 
pense, 610.    (See  also  Instruments,  Stations.) 

Termtaal  room  equipment;  investment,  220;  repair 
expense,  610. 

Testing  for  troubles,  repair  charges  for,  xiv. 

Toll  lines;  investment,  250,  250  note;  rents  from 
lease  of,  510;  repair  expense,  000. 

ToU  systems;  allocation  of  items  to.  Hi;  definitioa 
of,  ill;  revenue  Mm,  510. 

Tools;  invebtment,  260;  repair  expenaa,  (M. 

Traffic  expense,  AfiO,  660. 

Transportation  ooats;  inclusion  in  cost  of  materlala 
and  supplies,  ix,  135;  indosion  in  cost  of  repaiia, 

XV. 

Traveling  arpansea  of  gwaral  ofAoers  and  em- 
ployees, 680. 
Tree  trimming,  repair  charges  for,  xiv. 
Troubles,  repair  charges  for  correcting,  xiv. 

Uncollectible  biUs,  income  charges  for,  370. 
Undistributed  conatmotion  expenditures,  270. 

Vouchers  audited,  liability  balances  for,  175. 

Wages.    (See  Pay.) 

Wagons;  investmeont,  260;  repair  exjMnse,  640. 

Water  plants  not  used  in  telephone  operations;  in- 
vestment, 106;  revenues,  310;  maintcnanoa  and 
operatian,  340. 

Wear  and  tear,  depreciation  charges  for,  xvL 

Wire  plant;  reconstructioD  costs  for,  xii;  exchange 
plant  investment,  240;  t<^  plant  Investment,  250; 
repair  txpmmt,  600. 

Wires;  repair  (diarges  for  correcting  troubles,  xiv; 
repair  charges  for  rearranging,  xiv ;  interior  wiring 
investment,  220,  230;  outride  wiring  investment, 
240,  250;  repair  of  outside  wiring,  600;  repair  of 
taterior  wiring,  610;  interior  wire  abandoned  in 
removals,  620. 

Working  fund  asset  balances,  130. 


A1»I»E]VI>IX:. 


♦ 


BOOKKEEPING  SYSTEM. 

Suggested  for  Small  Telephone  Companies. 

The  bookkeeping  system  here  described  is  suggested  for  the  use  of  small  telephone 
companies.  It  is  offered  as  an  aid  in  the  keeping  of  a  set  of  books  that  will  meet  the 
accounting  needs  of  such  companies,  and  that,  in  the  case  of  those  companies  subject 
to  the  jurisdiction  of  the  Interstate  Conmierce  Conmiission,  will  .comply  with  the 
requirements  contained  in  the  Uniform  System  of  Accounts  prescribed  for  them  by 
the  Ck)mmis8ion.  The  use  of  this  bookkeeping  system,  in  whole  or  in  part,  is  not 
obligatory,  and  companies  may  adopt,  for  the  present,  any  other  bookkeeping  system 
desired  by  them  if  the  one  chosen  will  produce  the  results  required  by  the  System  of 
Accounts. 

GENERAL  INSTRUCTIONS. 

Double  entry.— The  double-entry  method  should  be  used  in  keeping  the  accounts 
of  a  company.  The  essential  principle  of  double-entry  bookkeeping  is  that  for  ever>' 
debit  there  must  be  a  corresponding  credit.  Care  should  be  taken  to  distinguish 
between  debits  and  credits  representing  assets  and  liabilities  and  those  representing 
revenues  and  expenses.  The  former  are  called  balance-sheet  accounts,  and,  taken 
together,  present  a  statement  of  the  condition  of  a  company's  business  at  any  given 
time.  The  latter  cover  the  operations  of  a  company  and  at  the  end  of  the  year  are 
closed  through  the  income  accounts  into  balance-sheet  account  No.  195,  "Surplus." 

ACCOUNTING  FORMS. 

Becord  forms. — ^Printed  forms  of  several  kinds  are  suggested  for  use  in  keeping 
accounting  records.  The  use  of  each  form  is  explained  separately  under  its  proper 
head  and  model  forms  are  given  with  certain  entries  thereon  to  indicate  further  their 
use.    The  full  list  of  suggested  forms  is  as  follows: 


Form  1. — General  ledger. 
Form  2. — Subscribers  ledger. 
Form  3. — Cash-journal. 
Form  4. — Voucher  record. 
Form  5. — Voucher. 
Form  6. — Subvoucher. 


Form  7.— Check. 
Form  8.— Subscriber's  bill. 
Form  9. — Daily  work  report. 
Form  10.— Payroll. 
Form  11. — Stock  record. 


The  copies  of  the  recommended  forms,  as  given  herewith  in  reduced  size,  show  the 
headings  and  arrangement  of  columns.  Italic  letters  to  indicate  specific  columns  are 
inserted  to  permit  reference  thereto  in  the  explanatory  text,  but  these  letters  form 
no  necessary  part  of  the  forms. 

The  forms  here  described  are  considered  necessary  for  proper  accounting  by  small 
companies.  It  may  be  desirable  to  use  additional  forms  or  expand  the  forms  here 
suggested,  in  order  to  provide  additional  information  or  to  meet  local  conditions. 
It  may  be  said  also  that  the  forms  here  suggested  are  intended  merely  for  the  account- 
ing needs  of  the  companies,  and  that  other  forms  will  probably  be  needed  to  show 
location  and  kinds  of  plant,  records  of  traffic  conditions,  employees'  records,  and 
other  statistical  information. 

Oeneial  ledger  (Porm  1).— The  ledger  is  a  general  record  in  which  items  are  assem- 
bled in  the  respective  accounts  to  which  they  relate.    It  presents  a  summary  of  all 

(33) 


1. 


34 

business  transactions  classified  under  appropriate  heads.  For  each  debit  made  to  an 
account  in  the  ledger  a  corresponding  credit  should  be  made  to  some  other  account, 
and  for  each  credit  entry  a  corresponding  debit  should  be  made.  All  entries  made 
in  the  general  ledger  should  come  from  the  cash-joiuiial. 

Ijcdger  accounts  should  be  provided  for  each  of  the  balance-sheet  accounts  which  may 
be  applicable  to  the  company's  business.  WTiere  the  title  and  definition  of  a  balance- 
sheet  account  clearly  indicate  that  it  is  a  summary  of  other  ledger  accounts  it  is  not 
necessary  that  a  distinct  ledger  account  be  provided  for  the  summary.  For  example, 
account  No.  100,  "  Plant  and  equipment,"  is  a  summary  of  accounts  Nos.  200  to  290, 
inclusive;  therefore,  since  ledger  accounts  are  provided  for  accounts  Nos.  200  to  290, 
it  is  not  necessary  to  provide  on  the  books  an  account  for  No.  100.  Ledger  accounts 
should  be  similarly  provided  for  each  of  the  plant  and  equipment,  income,  operating 
revenue,  and  operating  expense  accounts  in  so  far  as  the  business  requires. 

Subscribers  ledger  (Form  2). — ^The  subscribers  ledger  is  a  book  of  original  entry. 
It  should  contain  a  complete  record  of  all  revenues  accruing  from  subscribers  and 
other  patrons  for  services,  as  well  as  a  record  of  collections  made. 

When  a  telephone  is  installed  the  information  called  for  by  columns  a  to  f  and  column 
g  should  be  entered  immediately.  The  revenue  due  for  each  month  should  be  entered 
monthly  in  columns  i  to  ib  and  the  total  extended  to  column  /.  At  the  end  of  the 
month  the  columns  i  to  /  should  be  footed  and  an  entry  should  be  made  in  the  cash- 
journal  to  cover  (see  entry  No.  2)  the  totals  of  columns  i,  j,  and  k.  As  the  collections 
are  made  they  should  be  posted  in  colimins  m  and  n.  The  total  of  such  collections 
for  each  day,  or  for  the  period  for  which  settlements  are  made  with  collectors,  should 
be  covered  by  an  entry  in  the  cash-journal  (see  entry  No.  3). 

If  any  allowances  are  made  on  account  of  failures  in  service,  or  for  any  other  lawful 
reasons,  the  amount  allowed  in  each  case  should  be  entered  in  coliman  o,  "Allow- 
ances." The  total  of  such  allowances  for  each  month  should  be  charged  by  entry 
in  the  cash-journal  to  the  revenue  account  (No.  500,  510,  or  520)  to  which  they  relate 
and  credited  to  account  No.  125,  "Due  from  subscribers  and  agents."  (See  entry 
No.  4.) 

When  service  is  paid  for  in  advance  the  full  amount  of  the  payment  should  be  entered 
in  column  n,  "Paid— Amount,"  and  the  balance  applicable  to  future  months  should  be 
carried  forward  in  red  ink  to  the  next  succeeding  month  in  column  p,  "Balance  due." 
If  this  balance,  as  brought  forward,  is  more  than  enough  to  cover  the  month's  bill,  a 
red-ink  entry  should  be  made  of  the  amount  due  subscriber  in  column  I,  "Total  due," 
and  a  like  amount  carried  to  column  p  of  the  next  month  and  so  on  until  the  pre- 
payment is  exhausted.    (See  fifth  item  on  Form  2.) 

Great  care  should  be  exercised  in  posting  the  subscribers  ledger,  and  the  totals 
should  be  drawn  off  each  month  and  proved.  This  may  be  done  by  taking  off  the 
totals  as  follows: 

Debit  balance  at  beginning  of  month  (black-ink  entries  in  column  h).  $26. 75 

Exchange  (column  t) 24. 00 

Tolls  (column  j) 6.00 

Miscellaneous  (column  k) 1. 00 

Total 57.75 

Less: 
Credit  balance  at  beginning  of  month  (total  of  red-ink  entries 

in  column  h) $7. 00 

Amount  paid  (column  tj) 32. 45 

Allowances  (column  o) 3. 25 

Total 42.70 

Difference 15.05 


I 


35 

The  difference  should  equal  the  difference  between  the  total  debits  and  total  credits 
carried  forward  in  column  p  for  the  next  month. 

The  form  of  subscribers  ledger  is  designed  for  companies  assessing  and  collecting 
revenues  monthly.  If  revenues  are  assessed  quarterly  or  by  any  period  other  than 
monthly  the  ledger  may  be  prepared  to  fit  the  particular  case. 

Cash-journal  (Form  3). — The  cash-journal  is  a  combination  of  the  cash  book  and  the 
journal  and  in  it  are  recorded  all  the  transactions  which  are  later  posted  to  the  general 
ledger. 

The  first  three  colimuis  (a,  6,  and  c)  are  intended  for  debits  and  the  last  three  col- 
umns (d,  e,  and,/}  are  intended  for  credits.  Following  the  principle  of  double-entry 
bookkeeping,  for  each  debit  entered  in  any  one  or  all  of  the  first  three  columns  there 
should  be  an  equal  credit  entry  in  any  one  or  all  of  the  last  three  columns. 

In  column  a,  *  *  Cash, ' '  should  be  entered  the  amount  of  all  cash  received .  This  may 
be  done  for  each  item  of  cash  received,  or,  if  a  proper  supplementary  record  is  kept, 
it  may  be  posted  by  totals.  F'or  example,  if  the  collections  as  received  are  posted  in 
the  subscribers  ledger,  the  collections  for  the  day,  or  other  period  for  which  settlement 
is  made  with  collector,  may  be  posted  in  one  entry  in  the  cash-journal. 

In  column  6,  "Accounts  payable,"  should  be  entered  the  amounts  of  checks  issued 
in  payment  of  vouchers,  a  corresponding  credit  entry  being  made  in  colimm  /,  "Cash." 
Such  items  may  be  entered  individually  or  by  days  or  other  periods. 

In  column  c,  "Sundries,"  should  be  entered  all  other  debits.  This  will  include 
the  debit  side  of  adjusting  entries,  and  other  entries  not  covered  by  cash  or  vouchers, 
such  as  depreciation  charges,  accruals  of  taxes,  accruals  of  interest,  etc. 

The  column  marked  \/  is  the  posting  column.  In  it  should  be  entered  the  nimiber 
of  the  page  in  the  general  ledger  in  which  the  item  is  posted,  or  a  check  mark  should 
be  made  to  show  that  nothing  has  been  omitted,  as  in  the  case  of  posting  from  totals 
of  columns  a,  6,  e,  and/.  In  column  headed  "Particulars"  should  be  entered  suffi- 
cient detail  to  explain  fully  every  transaction. 

In  column  d,  "Sundries."  should  be  entered  all  credits  excepting  those  provided  for 
by  columns  e  and  /.  In  the  usual  cases  these  entries  will  be  the  corresponding  credits 
for  the  debits  entered  in  column  c. 

In  column  e,  "Due  from  subscribers  and  agents."  should  be  entered  all  amounts 
collected  on  accounts  carried  in  the  subscribers  ledger  (Form  2),  corresponding  debits 
being  entered  in  column  a,  "Cash."  These  items  may  be  entered  individually,  but 
it  is  preferable  that  they  be  entered  daily  or  for  some  other  period.  For  the  purpose 
of  accounting  for  the  collections  by  days  or  other  periods,  stubs  to  the  subscribers'  bills 
or  daily  or  periodical  statements  of  collections  may  be  used. 

The  items  in  columns  c  and  d,  "Sundries,"  should  l)e  posted  indiyidually  to  the 
debit  or  credit  of  the  general  ledger  accounts  affected.  They  may  be  posted  from 
time  to  time  during  the  month,  or  at  the  end  of  the  month. 

The  totals  of  columns  a  and  /should  be  posted  monthly  to  the  debit  and  credit 
sides,  respectively,  of  general  ledger  account  No.  1 15,  "Cash."  The  total  of  column 
6,  "Accounts  payable,"  should  be  debited  monthly  to  general  ledger  account  No.  175, 
"Accounts  payable."  The  total  of  column  e,  "Due  from  subscribers  and  agents," 
should  be  credited  monthly  to  general  ledger  account  No.  125,  "Due  from  sub- 
scribers and  agents. ' ' 

The  entries  in  the  cash-journal  are  to  be  made  daily  in  the  order  in  which  they  occur. 
The  cash-journal  is  to  be  footed  and  closed  out  at  the  end  of  each  month  and  started 
anew  at  the  beginning  of  the  next  month. 

If  the  books  have  not  heretofore  been  kept  by  the  double-entry  system  and  if  a  more 
correct  record  is  not  at  hand  an  appraisal  should  be  made  of  all  the  assets  and  1  labilities, 
including  the  plant  and  equipment.  A  statement  based  on  the  assets  and  liabilities 
should  be  prepared  from  such  appraisals  or  records  obtainable  and  the  difference 
between  the  total  assets  and  the  total  liabilities  should  be  carried  to  account  No.  195, 


36 

'Surplus."  An  opening  entry  should  be  made  in  the  cash-journal  based  on  such 
statement.    Entry  No.  1  on  the  cash-journal  is  given  as  an  example  of  such  an  entry. 

Voucher  record  (Form  4). — The  voucher  record  is  designed  for  the  keeping  of  a  com- 
plete record  of  all  obligations  incurred  and  of  disbursements  made,  without  the  keeping 
of  a  separate  ledger  account  with  each  creditor.  It  also  provides  an  easy  method  of 
making  charges  to  the  accounts  ai'fected. 

All  vouchers  should  be  entered  on  the  voucher  record  in  numerical  order  in  the 
month  in  which  the  voucher  is  made,  regardless  of  whether  it  is  the  intention  to  pay 
them  during  the  month  or  at  a  later  date. 

The  total  amount  of  the  voucher  should  be  included  in  column  *  *  Amount  of  voucher  ** 
and  distributed  over  the  various  columns  according  to  the  headings  of  the  columns. 
Separate  columns  are  provided  for  the  operating  expense  accounts,  the  plant  and 
equipment  accounts,  and  other  accounts  which  may  be  used  frequently.  A  mis- 
cellaneous column  is  provided  for  entries  to  accounts  which  are  not  often  used. 
The  voucher  record  should  be  footed  monthly  and  an  entry  should  be  made  in  the 
cash-journal  (see  entry  No.  5). 

As  checks  are  issued  in  payment  of  vouchers  they  should  be  entered  in  the  voucher 
record  in  the  column  "Paid. "  As  the  total  of  vouchers  issued  u'ill  be  posted  through 
the  cash-journal  to  the  credit  of  account  No.  175,  "Accounts  payable,"  and  as  the 
total  of  the  checks  issued  are  debited  to  the  same  account,  the  balance  in  this  account 
in  the  general  ledger  should  show,  when  the  postings  are  made,  the  amount  of  vouch- 
ers unpaid.  A  possible  exception  to  the  foregoing  may  be  the  amounts  carried  to 
account  No.  175  when  the  books  of  the  company  are  opened,  for  which  amounts  no 
vouchers  may  have  been  issued  (see  entry  No.  1  on  Form  3). 

Voucher  (Form  5). — Vouchers  should  be  made  to  cover  all  expenditures  of  moneys. 
They  should  be  prepared  as  soon  as  purchases  are  made  or  expenses  are  incurred.  TTie 
voucher  should  show  all  the  information  called  for  on  the  form.  In  the  column 
headed  "  Particulars"  should  be  entered  sufficient  detail  to  explain  fully  the  purpose 
for  which  the  voucher  is  is8ue<l,  excepting  that  where  the  original  invoice,  bill,  or 
other  supporting  papers  give  the  full  information,  the  explanation  on  the  voucher 
may  be  given  briefly.  On  the  back  of  the  form,  in  the  space  provided  for  "  Distribu- 
tion," the  amount  of  the  voucher  should  be  distributed  over  the  accounts  affected, 
in  accordance  with  the  System  of  Accounts.  The  printed  form  shows  the  accounts 
frequently  used  and  has  blank  spaces  for  filling  in  with  titles  of  other  accounts. 

The  vouchers  should  be  numbered  consecutively,  commencing  with  No.  1  each 
year,  and  should  be  filed  in  numerical  order.  The  invoices,  subvouchers,  payrolls, 
etc. ,  supporting  the  vouchers  should  be  securely  attached  to  and  filed  with  the  vouch- 
ers. Each  voucher  should  have  attached  to  it  the  papers  supporting  it  or  should 
have  full  information  thereon. 

It  is  not  necessary  that  a  separate  voucher  be  made  for  each  invoice,  etc.  If  pay- 
ment covering  several  invoices,  etc.,  is  to  be  made  to  a  single  person  or  company,  the 
amounts  may  be  combined  on  one  voucher. 

Subvoucher  (Form  6). — This  form  is  provided  for  taking  receipts  for  moneys  paid  out 
in  advance  of  the  issuance  of  the  regular  voucher.  It  should  be  used  to  record  amounts 
paid  by  foremen  and  workmen  for  meals,  team  hire,  purchase  of  minor  materials  and 
supplies;  for  amounts  paid  out  by  exchange  managers,  cashiers,  et  al.,  from  petty  cash 
funds;  and  like  expenditures. 

The  subvouchers  should  be  accumulated  each  month  and  vouchers  (Form  5)  to 
cover  should  be  issued  in  favor  of  the  manager,  cashier,  foreman,  or  other  employee 
who  paid  out  the  monejrs.  The  subvouchers  should  be  attached  to  the  vouchers 
as  evidence  of  the  purposes  for  which  the  moneys  have  been  exp>ended. 

Check  (Form  7). — The  check  is  in  the  form  of  the  usual  commercial  bank  check.  A 
special  form  may  be  adopted  but  the  usual  form  of  check  will  answer  the  purpose. 


<^ 


i, 


37 

The  vouchers  are  issued  and  put  through  the  books  as  soon  as  any  bill  or  exi)ense 
accrues.  Checks  should  be  issued  as  the  vouchers  are  paid.  A  separate  check  may 
be  issued  for  each  voucher  or,  when  two  or  more  vouchers  are  issued  for  the  same 
person,  one  check  may  be  issued  for  the  total  amount  of  the  vouchers.  If  employees 
are  paid  by  check,  the  requisite  number  of  checks  may  be  issued  for  the  one  voucher 
covering  the  payroll. 

An  entry  covering  the  checks  issued  should  be  made  in  the  cash- journal,  charging 
account  No.  175,  "Accounts  payable,"  and  crediting  account  No.  115,  "Cash."  Sep- 
arate entries  maybe  made  for  each  check,  or  entries  maybe  made  for  the  totals  by  days 
or  other  periods.    (See  entry  No.  6  on  Form  3.) 

Subscriber's  biU  (Form  8).— This  is  a  form  of  bill  to  be  made  to  subscribers  show- 
ing charges  for  exchange,  toll,  and  other  services.  The  subscribers  ledger  should  be 
first  posted  and  the  bills  prepared  from  the  subscribers  ledger. 

The  toll  charges  should  be  listed  on  the  back  of  the  bill  and  the  total  transferred  to 
the  space  provided  on  the  face  of  the  bill.  Messenger  service,  telegrams,  and  other 
charges  may  be  included  on  the  blank  line  on  face  of  the  bill.  If  desired,  separate 
bills  may  be  provided  for  exchange  and  for  toll  service. 

The  bill  may  be  provided  with  a  stub  to  be  detached  when  bill  is  paid  and  used  for 
posting,  or  posting  may  be  made  from  the  collector's  or  cashier's  reports  of  collections. 

Daily  work  report  (Form  9).— In  order  to  distribute  properly  the  pay  of  employees 
which  is  chargeable  to  various  accounts  and  to  account  properly  for  materials  and 
supplies  used,  it  is  necessary  to  keep  a  record  of  the  time  devoted  to  and  the  mate- 
rials and  supplies  used  on  particular  jobs.  This  is  especially  desirable  when  an 
employee  devotfes  part  of  his  time  to  construction,  the  cost  of  which  is  chargeable 
to  Plant  and  Equipment,  and  part  to  repair  work,  which  is  chargeable  to  Operating 
Expenses.  Form  9  may  be  used  by  a  small  company  employing  one  man  to  do 
practically  all  the  work,  or,  if  desirable,  in  such  cases  the  time  may  be  distributed 
on  an  estimated  basis.  The  daily  work  reports  may  be  used  as  a  basis  for  prepar- 
ing the  payrolls  and  for  distributing  the  pay  of  employees  on  the  vouchers  cover- 
ing the  payrolls.     (See  payroll.  Form  10.) 

The  materials  and  supplies  shown  on  the  work  reports  should  be  tabulated  at  the 
end  of  each  month  and  an  entry  made  in  the  cash-journal  crediting  account  No.  135, 
"Materials  and  supplies,"  and  charging  the  accounts  benefited.  (See  entry  No.  7 
on  Form  3.) 

Payroll  (Form  10).— The  payroll  is  provided  for  recording  the  salaries  and  wages  of 
all  employees,  however  employed.  This  form  of  payroll  is  provided  for  companies 
making  payments  semimonthly.  In  case  payments  are  made  by  other  periods  the 
form  should  be  amended  to  suit  the  conditions.  Vouchers  should  be  prepared  to 
cover  the  total  of  the  payrolls  for  each  period,  and  the  expense  should  be  distributed 
to  the  various  accounts  on  the  voucher.  The  distribution  may  be  made  direct  from 
the  payroll  when  practicable,  but  if  the  employee's  time  is  split  up  among  various 
classes  of  work  it  will  be  necessary  to  prepare  the  distribution  from  the  daily  work 
reports  (Form  9). 

If  payment  is  made  by  check,  separate  checks  should  be  issued  for  each  employee. 
If  payment  is  made  in  cash,  the  voucher  can  be  dravm  in  favor  of  the  paymaster  or 
cashier  and  one  check  issued  in  his  favor  for  the  entire  amount.  (See  voucher  No.  4 
on  Form  4.) 

The  employee's  receipt  for  pay  may  be  obtained  on  the  payroll  in  space  provided 
for  that  purpose  or  a  separate  receipt  from  each  employee  may  be  taken  on  a  sub- 
voucher  (Form  6).  If  the  latter  plan  is  adopted,  the  subvouchers  should  be  filed 
with  the  payroll  and  voucher. 

Stock  record  (Form  11).— This  form  is  designed  to  keep  a  record  of  materials  and 
supplies  on  hand,  by  quantities  and  values.  A  separate  record  should  be  kept  for 
each  commodity. 


38 

When  purchaoee  are  made  they  should  be  recorded  under  "Received  "  and  the  unit 
cost  of  each  item  should  be  extended  in  column  "Unit  cost."  When  materials  and 
supplies  are  recovered  from  plant  and  returned  to  stock  they  should  be  also  entered 
under  "Received"  and  the  value  thereof  should  be  shown  under  "Cost"  and  "Unit 
cost. ' '  In  column  *  *  Reference  "  should  be  shown  the  number  of  the  voucher  covering 
the  purchase  or  the  record  covering  the  materials  and  supplies  returned  to  stock. 

At  the  end  of  each  month  the  materials  and  supplies  used  during  the  month,  as 
shown  on  the  daily  work  report  (Form  9),  should  be  summarized  and  values  based  on 
the  unit  cost  should  be  assessed  for  each  commodity.  The  total  of  each  commodity 
by  quantities  and  value  should  be  entered  on  Form  11  under  "  Issued."  There  should 
also  be  entered  thereunder  the  quantities  and  values  of  materials  and  supplies  sold 
or  disposed  of  otherwise. 

As  the  total  cost  of  materials  and  supplies  purchased  and  those  returned  to  stores 
is  charged  to  account  No.  135,  "Materials  and  supplies,"  and  the  total  value  of  mate- 
rials and  supplies  used  or  otherwise  disposed  of  is  credited  to  account  No.  135,  the 
balance  in  account  No.  135  should  equal  the  value  of  the  various  materials  and  sup- 
plies on  hand  as  shown  by  the  stock  record. 

EXPLANATION  OF  AND  EXAMPLES  SHOWING  THE  TREATMENT  OF 
CERTAIN  MATTERS  IN  THE  BOOKS  OF  THE  COMPANY. 

Depreciation.— Assuming  that  the  ledger  value  of  plant  and  equipment  is  $60,000, 
and  that  a  rate  of  depreciation  of  8  per  cent  per  annum  is  determined  upon,  the  annual 
charge  for  depreciation  would  be  $4,800,  and  the  monthly  charge  one-twelfth  or  $400. 
The  following  entry  should  be  made  monthly  on  the  cash-journal:     * 

630.  Depreciation  of  plant  and  equipment $400 

To  185.  Depreciation  reserve 400 

For  one-twelfth  of  estimated  depreciation  on  plant  and  equip- 
ment at  8  per  cent  per  annum. 

The  amounts  credited  to  account  No.  185,  "Depreciation  reserve"  should  remain  in 
that  account  until  charged  out  for  reconstruction  or  for  retirements  of  plant  and 
equipment. 

Beconstraction. — When  reconstruction  as  defined  in  section  12,  page  11,  of  the 
System  of  Accounts  is  performed,  the  cost  thereof  should  be  charged  to  account  No. 
185,  "Depreciation  reserve, "  to  the  extent  that  provision  shall  have  been  made  for 
such  expense  in  previous  credits  to  the  reserve. 

For  example,  if  an  exchange  pole  line  is  reconstructed  at  a  cost  of  $750,  with  salvage 
recovered  amounting  to  $50,  the  cost  of  reconstruction  should  be  charged  as  follows: 

185.  Depreciation  reserve $700 

135.  Materials  and  supplies 50 

The  charge  to  the  reserve  is  based  on  the  assumption  that  depreciation  has  been  set 
up  on  the  pole  line  since  it  wap  originally  installed. 

If,  however,  the  depreciation  has  not  been  provided  for  during  the  entire  life  of  the 
pole  line  and  itis  estimated  that  the  reserve  contains  $300  on  account  of  that  property, 
the  expense  should  be  distributed  as  follows: 

185.  Depreciation  reserve $300 

600.  Repairs  of  wire  plant 400 

135.  Materials  and  supplies 50 

If  reconstruction  shall  not  have  been  provided  for  by  credits  to  the  reserve  the 
entire  cost  should  be  charged  to  the  appropriate  operating  expense  account. 

Retirements  of  plant  and  equipment. -Assuming  that  a  switchboard  originally 
installed  at  a  cost  of  $1,000  is  retired  from  service,  that  the  old  switchboard  is  sold  for 


39 

$150,  and  that  the  cost  of  removing  the  switchboard  is  $20,  the  entry  in  the  cash-journal 
should  be  as  follows: 

,  185.  Depreciation  reserve $350 

*"  130.  Accounts  receivable  (or  Cash) 150 

To  220.  Central  office  equipment $1  000 

For  switchboard  in  Rockville  central  office  retired. 

A  voucher  should  be  issued  covering  the  cost  of  removing  ($20)  and  charged  to 
account  No.  185,  "Depreciation  reserve."  The  above  chaiges  to  the  reserve  are 
based  on  the  assumption  that  depreciation  shall  have  been  set  up  on  the  switchboard 
•ince  it  was  originally  installed. 

If,  however,  the  depreciation  has  not  been  provided  for  during  the  entire  life  of  the 
switchboard  and  it  is  estimated  that  the  reserve  contains  $340  on  account  of  that  prop- 
erty, the  casli-journal  entry  should  be  as  follows: 

185.  Depreciation  reserve 134© 

640.  Other  maintenance  cxp>enses 510 

130.  Accounts  receivable 150 

To  220.  Central  office  equipment |i  qqq 

The  voucher  covering  the  cost  of  removing  ($20)  should  be  charged  to  account  No. 
640,  "  Other  maintenance  expenses." 

Accruals  of  taxes,  interest,  rents,  etc.— One  of  the  principal  purposes  of  correct  ac- 
counting is  to  spread  equitably  over  a  period  of  time  the  expenses  properly  applicable 
to  the  whole  period,  instead  of  showing  the  entire  amount  of  the  expense  in  the  month 
or  year  in  which  it  is  paid.  This  is  especially  desirable  where  the  accounts  are  closed 
each  month.  In  order  to  take  care  of  such  expenses,  it  is  necessary  to  charge  to  Oper- 
ating Expenses  each  month  the  proper  proportion  (estimated,  if  not  known)  of  such 
I  expense,  and  to  carry  a  corresponding  amount  in  a  balance-sheet  account  until  the 

>  payment  is  made.    Assuming  that  the  taxes  for  the  year  are  estimated  as  $100,  an 

entry  should  be  made  in  the  cash-journal  monthly  as  follows: 

350.  Taxes .* ig  33 

To  180.  Accnied  liabilities  not  due $8. 33 

To  one-twelfth  of  estimated  taxes  for  the  year. 

When  the  taxes  are  paid,  a  voucher  should  be  issued  and  charge  should  be  made  to 
account  No.  180,  "Accrued  liabilities  not  due."    (See  voucher  No.  5  on  Form  4.) 

Prepayments.— When  payment  of  expense  is  made  in  advance  of  the  period  to  which 
it  applies,  it  is  necessary  that  arrangement  be  made  for  charging  in  each  month  or  period 
the  proper  proportion.  For  instance,  if  an  insurance  premium  amounting  to  $240 
is  paid  on  a  policy  running  two  years  into  the  future,  the  payment  should  be  treated 
in  the  manner  following: 

When  the  premium  is  paid,  a  voucher  should  be  issued  and  the  whole  amount  charged 
%  to  account  No.  145,  "  Prepaymente  "  (see  voucher  No.  6  on  Form  4).     Each  month  an 

entry  should  be  made  in  the  cash-journal  as  follows: 

680.  Other  general  expenses ^q 

145.  To  Prepayments hq 

For  insurance  for  month  of  January,  1915. 

At  the  end  of  the  period  the  entire  amount  charged  to  account  No.  145,  "Prepay- 
ments," under  this  method  will  have  been  credited  to  that  account  and  charged  to  the 
operating  expense  accounts. 

Petty  cash  fund.— It  may  be  necessary  at  times  to  make  immediate  cash  payments 
for  sundry  accounts  prior  to  the  issuance  of  the  regular  voucher  and  check .  Such  pay- 
ments may  be  handled  through  a  petty  cash  fund.  To  create  such  a  fund,  voucher 
for  whatever  amount  is  considered  sufficient  should  be  made  in  favor  of  the  cashier 


40 


or  other  person  who  is  to  make  the  pay  men  t8.  The  amount  of  this  voucher  should  be 
charged  on  the  voucher  record  to  account  No.  130,  "Accounts  receivable  "  (see  voucher 
No,  7  on  Form  4),  and  a  subaccount  should  be  opened  in  the  name  of  the  cashier. 
This  account  should  stand  at  that  amount  until  it  becomes  necessary  to  increase  the 
amount,  when  an  additional  voucher  should  be  issued,  or  to  decrease  it,  when  an 
entry  should  be  made  in  the  cash-journal. 

As  moneys  are  paid  out  by  the  cashier,  receipts  should  be  taken  on  sub  voucher  (Form 
6)  and  a  voucher  should  be  put  through  monthly  to  reimburse  the  cashier  for  money 
disbursed  during  the  month .  This  method  may  be  used  also  when  funds  are  advanced 
to  agents,  foremen,  and  others. 

Telephone  installations,  take-onts,  and  moves. — It  is  important  that  the  investment 
in  plant  and  equipment  as  shown  by  accounts  Nos.  200  to  290  be  kept  at  the  correct 
figures.  The  system  of  accounts  contemplates  that  when  new  telephones  are  installed 
the  cost  of  the  instrument,  etc.,  plus  the  cost  of  installation,  shall  be  charged  to 
account  No.  230,  "Station  equipment."  When  telephones  are  taken  out,  the  cost  of 
the  instrument,  plus  the  cost  of  original  installation,  shall  be  credited  to  account 
No.  230,  "Station  equipment";  and  when  telephones  are  moved  from  one  location  to 
another,  the  cost  of  moving  shall  be  charged  to  account  No.  620,  "Station  removals 
and  cfianges."  This  will  insure  the  correctness  of  the  plant  and  equipment  accounts, 
which  should  include  the  cost  of  the  telephones  in  use.  When  telephones  are  taken 
out  it  may  be  difficult  to  ascertain  the  original  installation  cost.  This  cost  may  be 
handled  on  averages,  and  a  simple  method  of  treatment  is  as  follows: 

Charge  or  credit  account  No.  230,  "Station  equipment,"  and  credit  or  charge 
account  No.  135,  "Materials  and  supplies,"  with  the  value  of  all  instruments  installed 
or  removed  (not  merely  changed  in  location).  Charge  account  No.  620,  "Station 
removals  and  changes,"  with  the  cost  of  all  installations  and  take-outa (not  including 
value  of  instruments),  and  cost  of  all  moves  in  location. 

At  the  end  of  the  year  make  an  entry  in  the  cash-journal,  charging  account  No.  230, 
*  *  Station  equipment, ' '  and  crediting  account  No.  620,  * '  Station  removals  and  changes, ' ' 
with  such  portion  of  the  amount  charged  to  account  No.  620  during  the  year  as  the 
increase  in  the  number  of  telephones  in  service  at  the  end  of  year  bears  to  the  total 
number  of  installations,  take-outa,  and  moves  during  the  year. 

For  example,  if  during  the  year  there  were  200  new  telephones  installed,  60  taken 
out,  and  100  moved  at  a  total  expense  of  $1,125,  there  would  be,  by  counting  the 
moves  as  two  operations — 

Installations 200  operations. 

Take-outs 50  operations. 

Moves 200  operations. 

Total 450  operations. 

The  net  increase  in  the  number  of  telephones  in  use  being  150,  which  is  one-third  of 
the  total  operations,  one-third  <.)f  the  total  expense,  or  $375,  should  be  cliarged  to 
account  No.  230  and  credited  to  account  No.  620  by  an  entry  in  the  cash-journal  at 
the  end  of  the  year.  The  method  may  be  used  only  when  the  number  of  telephones 
in  use  increases  from  one  year  to  the  next. 


Form  1. — General  Ledger. 


Account  No 

Debit. 

Cbedit. 

Date. 

Folio. 

Amount. 

Date. 

Folio. 

Amount. 

Form  2. — Subscribers  Ledger  (left  page). 


HOME    TELEPHONE    COMPANY. 

SUBSCRIBERS  LEDGER. 

Account 
(or  tele- 
phone) 
number. 

Name  of  subsorilxr. 

Address. 

Service. 

Date 
Installed. 

Date 
removed. 

Rate 

per 

month. 

January. 

February. 

Bal.  due. 

Exch. 

TolL 

Miscl. 

Totai 
due. 

Paid. 

Allow- 
ances. 

Bal.  due. 

Exch. 

Toll. 

Miscl. 

Total 
due. 

Paid. 

Allow- 
ances. 

Date. 

Amount. 

Date. 

Amoimt. 

(a) 

316 
422 
537 
693 
782 
793 
854 
861 
945 
960 
9S1 

(ft) 
Totals 

(c) 

• 

(rf) 

Res. 

Bus. 

Res. 
<< 

Bus. 

2Pty. 

i< 

Bus. 
Res. 

Bus. 

« 

(f) 

(f) 

2.00 
2.50 
2.00 
2.00 
2.50 
1.75 

(») 

(0 

2.00 
2.50 
2.00 
2.00 
2.50 
1.75 
1.75 
2.50 
2.00 
2.50 
2.50 

U) 

(») 

(0 

2.00 
6.50 
2.00 
2.75 
*LSO 

(m) 

1/12 

1/4 

(n) 

2.00 
6.00 

(0) 

(P) 

(?) 

(r) 

(») 

(0 

(tt) 

(p) 

(«) 

3.ro 

..50 

.50 

2.00 
.75 

1 

.65 
1.00 
1.00 

.50 
2.00 

.10 

2.00 
*1.S0 
1.00 
*.7S 
5.35 



1       •s.oo 

4.00 

.20 

6.95 
9.25 
.'4..^•» 

1/25 
1/6 

5.45 
10.00 

.:o 

1.75                7.00 

2.50 
2.00 
2.50 
2.50 

:               .25 

9,00 
3.00 

.60 



.35 

.10 

11.95 
5.50 

1/15 

9.00 

2.95 
5.50 

tl9.75 

24.00 

I        6.00 

t 

1.00 

t50.75 

32.45 

3.25 

1 15.06 

♦  Figures  in  italics  indicate  entrv  in  red  ink. 

t  The  totals  of  columns  h,  I,  and  p  are  net  amounts  or  differences  between  the  total  black  ink  entries  and  the  total  red  ink  entries  in  the  respective  columns. 

Note.— The  above  form  is  niled  for  the  left-hantl  j  a^e  and  covers  the  months  January  and  February.    The  ri(!ht-hand  j  aire  (the  reverse  side  of  thi.s)  may  be  niled  to  cover  the  months  September  to  December,  inclusive,  and  a  short  page,  three  months  on  each 
side.  in<-erted  to  cover  the  months  March  to  August,  inclusive.    This  arrangement  makes  it  possible  to  post  a  year's  business  without  rewriting  the  names'of  subscribers. 

3o819»— 14.    (Toliicep.40.)    No.  1 


Form  3.— Cash-Journal. 


Debits. 


HOME  TELEPHONE  COMPANY. 

CASH-JOURNAL. 

Month  of  January,  1915. 


Cash. 


(•) 


Aooounts 
payable. 


(» 


Sundiies. 


1    ^ 


(«) 


18,000 
450 
300 

fiOO 


32 


45 


827  KW 


00 
00 
00 
00 


31 


00 


50 
65 
10 


21 
20 
10 


00 
00 
00 


35 
75 
20 
25 
15  100 


5  00 
00 
00 
00 
00 


20 

11 

50 

240 

100 


00 
00 
00 
00 
00 


20 
15 
10 
15 


00 
00 
00 
00 


Particakn 


Janyl. 


(Entry  No.  1.) 


The  Home  Telephone  Company  opens  these  books  with  the  fol- 
lowing assets  and  liabilities: 
Assets 
290.  plant  and  equipment  In  service  Jan'y  1, 1915. 

115.  C^h. 

125.  Due  from  subscribers  and  agents. 

135.  Materials  and  supplies. 

Liabilities. 

160.  Capital  stock. 

170.  Notes  payable. 

175.  Accounts  payable. 

195.  Surplus. 


(Date) 


(Entry  No.  2.) 


125.  Due  from  subscribers  and  agents. 
To  500.  Exchange  revenues. 
610.  Toll  revenues. 
SaO.  Miscellaneous  revenues. 
For  revenues  for  month  of  Jan'y,  ViVt. 


(Date) 


(Entry  No 


116.  CMh.  ^     „  J    _  ♦. 

To  125.  Due  from  subecriljers  and  agents. 
For  collections  of  charges  for  Jany ,  1915. 


(Date) 


500.  Exchange  revenues. 

510.  Toll  revenues. 

520.  Miscellaneous  revenues. 

To  125.  Due  from  subscribers  and  agents. 

For  refunds  on  acct.  of  faihires  in  service. 


(Date) 


600.  Repairs  of  wire  plant. 

610.  Repairs  of  equipment. 

620.  Station  removals  and  changes. 

640.  Oth«- maint.  expenses. 

650.  Operators' wages. 

670.  General  office  salariss. 

680.  Other  general  expsnsss. 

135.  Materials  and  supplies. 

220.  Central  office  equipment. 

230.  Station  equipment. 

240.  Exchange  lines. 

130.  Accounts  receivable. 

146.  Prepayments. 

180.  Accrued  liabilities  not  due. 

To  175.  Accounts  payable. 

For  vouchers  for  month  of  Jan'y,  1915. 


(Date) 


(Date) 


(Entry  No.  4.) 


(Entry  No 


(Entry  No.  6.) 


i75.  Accounts  payable. 
To  115  Cash 
For  cash  paid  out  Jany.  1  to  Jany.  15  incl.,  as  per  check  stubs 


(Entry  No.  7.) 


230.  Station  equipment. 

240.  Exchange  lines. 

600.  Repairs  of  wire  plant. 

610.  Repairs  of  equipment. 

To  135.    Materials  and  supplies.  ,,.    ,,         _  iaic 

For  material  used  from  stock  during  month  of  January,  1»15 


35S19'    14.    (To  face  p.  40.)    No.  % 


Form  4.— Voucher  Record  (left  page). 


Date. 


Jan.  1 
1 
1 

15 
15 
15 

15 


J 


^ 


In  favor  of- 


Smith  Supply  Co. 
George  Brown. 
Edw.  Fox. 
W.T.Hall,  cashier. 
A.  T.  Johnson. 
Natl.  Fire  Ins.  Co. 

W.T.  Hall,  cashier. 


HOME  TELEPHONE  COMPANY 


Issuer!  for- 


Hardware, 

RentofofTice. 

Hire  of  teams. 

PajToll  for  Jany  1  to  15,  inc. 

Taxes  for  year  1914. 

Premium  on  insurance  policy  tor 

years  1915  and  19IG. 
For  working  fund. 


Totals.* 


35819"— 14.    (To  face  p.  40.)    No.I 


Paid. 


Date. 


Check 
No. 


1/15 

1/15 
1/15 
1/15 
1/15 

1/15 


100 

101 
102 
103 
104 

la*) 


Amount  of 

voucher. 

Credit  acct. 

175,  Accounts 

payable. 


2i.00 

30.00 

12.00 

2U0.00 

100.00 

240.00 


50.00 


647.00 


Operating  expenses. 


600 

Repairs  of 
wire  plant. 


610 

I  Repairs  of 
'equipment. 


620 
Station  re- 
movals ant! 
changes. 


630 
Deprecia- 
tion of 
P. and  E. 


640 

Other 

maint. 

expenses. 


650 

Operators' 
wages. 


6.00 

IVOO 


20.00 


21.00 


10.00 


20.00 


10.00 


.'t.OO 


660 

Other 

traffic 

expenses. 


35.00 


5.00 


35.00 


670 

General 

oflSce 

salaries. 


680 
Other 
general 
I  expenses. 


75.00 


20.00 


75.00 


20.00 


•  See  entry  No.  5  In  Form  3. 


VOUCHER  RECORD. 


I'lant  and  equipment. 


200 

Intangi- 
bles. 


210 

Land  and 
buildings. 


220 

Central 

office 

equipment. 


230 

Station 
equipment. 


15.00 


340 

Exchange 
lines. 


20.00 


15.00 


20.00 


250 


Toll  lines. 


6.00 
5.{« 


2G0 

(Jeneral 
equipment 


270 
Undis- 
tributed 
con.  expd. 


11.00 


280 

P.andE 


135 

Materials 
and 


purchased.!   s"PP"es- 


25.00 


25.00 


183 

Deprecia- 
tion 
reser\-e. 


Form  4.— Voucher  Record  (right  page). 
Month  of  Janfary,  1015. 


Miscellaneous. 


Acct 
No. 


Account. 


180 
145 

130 


Accrued  liabilities  not  due. 
Prepajments. 

Accounts  receivable. 


Amount . 


100.00 
240.00 

50.00 


390.00 


Form  5.— Voucher  (face). 


Form  5. — Voucher  (back). 


HOME  TELEPHONE  COMPANY. 


VOUCHER 


In  Favor  of 

Address 


Vouchee  No 

Month  or 191. 

Paid  by  Chick  No 

Date  or  Check l^l. 


Date. 


Particulars. 


Amount. 


Correct : 


Approved  for  payment: 


Correct : 


HOME  TELEPHONE  OO. 
Voucher  No Month  of 191 . . 

IM  FAVOR  OF 


Dw.'ri&uaon— (continued) 


Account. 


Amount 


Distribution. 


BALANCE  SHEET  ACCTS. 

I  1()5.  Other  property 
110.  Securities 
135.  Materials  and  supplies 
145.  Prepayments 
150.  Other 'debit  accounts 
170.  Notes  payable 
180.  Accrued  liabilities  not  due 
185.  Depreciation  reserve 
190.  Other  credit  accounts 


Account. 


Amount. 


OPERATING   EXPENSES. 

600.  Repairs  of  wire  plant 

610.  Repairs  of  equipment 

620,  Station  removals  and  changes 

630,  Depreciation  ol  plant  and  equip 

610.  Other  maint,  expenses 

65f),  Operators'  wapes 

660.  Other  traflic  expenses 

670.  General  oHu-e  salaries 

6!W.  Other  jreneral  expenses 


Amount. 


PLANT  AND  EQUIPMENT. 

200.  Intangibles 

210.  Land  and  buildings 

220.  Central  office  equipment 

230.  Station  equipment 

240.  Exchange  lines 

250.  Toll  lines 

260.  General  equipment 

270.  Undistribut»'d  const'n  exp'dr's 

280.  Plant  and  equip,  purchased 


INCOME  ACCOUNTS. 

310.  other  operating  revenues 

320.  Miscellaneous  income 

340.  Other  operating  expenses 

350.  Taxes 

360.  Interest  accrued 

370.  Miscellaneous  chgs.  to  income 

380.  Dividends  declared 


operating  revenues. 

500.  Exchange  revenues 
510.  Toll  revenues 
520.  Miscellaneous  revenues 
530.  Licensee  revenues— Cr. 
640.  Licensee  revenues— Dr. 


35819"— 14.    CTotecep.  40.)    No.  4 


'^ 


I 


I 


e 


'4 
■ 


O 


a 


i!    'i    I 


No. 


Form  6. — Subvoucher. 


mpm^mmmmmmmmm 


(Ptaw)  ,  i^>^) 


■OBfB  TBL.EPHONB  COMPANY. 


I 


To 


191.. 
Dr. 


Particulars. 


Amount. 


Total 


Received  of  the  Home  Telephone  Company, 


Dollars,  in  full  for  above  account 


(I>ikt«) 


(Signature) 


Form  7.— 4^heck. 


(Ctty) 


(State)  (D^) 


191-. 


FIRST  NATIONAL  BANK. 


Pay  to  the  order  of 


Dollars. 


For  . 


Countersigned  by 


Home  Telephone  Company. 


By 


(TitU.) 


(TlUe.) 


3Sm9*~14.    (To  face  p.  40.)    No.  5 


41 


\ 


^ 


■I 


'1 


H 


Aooount     "Y^ 
Telephone  ■^^"' 


Mr.  - 


Form  8.— Subscriber's  bill  (face). 


191    . 


To  Home  Telephone  Company,  Dr. 


Telephone  rental  for  month  of 191. 

Toll  charges,  as  per  statement  on  back 


Balance  due  on  former  bills. 


Total 


Received  payment, 

(Date)  ...    191 


(back.) 


Toll  chasqes  for 


Date. 


Message  to 


191 


Amount. 


Total. 


42 


Form  9.— Work  Report. 


HOME  TELEPHONE  COMPANY. 

Daily  Work  Report. 


Date 


Name 


43 


< 


•i 


'! 


Form  10.— Payroll. 


>  %■■ 


44 


Form  11.— Stock  Record. 


HOME  TELEPHONE  COMPANY. 

Stock  Record. 
Commodity, 

RECEIVED. 


Date. 


Received  from 


Ref. 


Quan- 
tity. 


Invoice. 


Cost. 

Frt.,  etc. 


Total. 


Unit 
cost. 


ISSUED. 


Date.  Reference.      '  Quantity. 


Value. 


Date. 


Reference. 


Quantity.     Value. 


* 


i 


o 


X 


UNIFORM  SYSTEM  OF  ACCOUNTS 


FOR 


TELEPHONE  COMPANIES 


AS  PRESCRIBED  3Y  THE 

t 

INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


FIRST  ISSUE 
Effective  on  Januai*y  i,  J913 


WASHINGTON 

1915 


OOLUMBIA  UNWERSITY 


UNIFORM  SYSTEM  OF  ACCOUNTS 


FOR 


TELEPHONE  COMPANIES 


AS  PRESCRIBED  BY  THE 


INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THB 
ACT  TO  REGULATE  COMMERCE 


FIRST  ISSUE 


Effective  on  Jamiary  1,  191S 


WASHINGTON 
191S 


The  Interstate  Commerce  Commission. 


Charles  A.  Prouty,  of  Vermont. 
JUDSON  C.  Clements,  of  Georgia. 
Franklin  K.  Lane,  of  California. 
Edgar  E.  Clark,  of  Iowa. 
James  S.  Harlan,  oflUinais. 
Charles  C.  McChord,  of  Kentucky. 
Balthasar  H.  Meyer,  of  Wisconnn. 

John  H.  Marble,  Secretary, 


A 


additional  copies 
of  this  pubucation  may  bk  procuhed  feom 

THB  SUPERINTENDEKT  OF  DOCUMENTS 

OOVXKNMENT  PRINTINO  OFFICE 

WASHINOTON,  D.  C. 

AT 

10  CENTS  PER  COPY 


(2) 


CONTENTS. 


Page. 

Order  of  the  Commission 5 

Introductory  letter 7 

General  instructions 9 

Telephone  companies  divided  into  two  classes 9 

Accounts  should  show  fixed  capital,  operating  revenues,  and 
operating  expenses  pertaining  solely  to  any  exchange  or 

toll  system  or  common  to  two  or  more  systems 9 

Balance-sheet  statement \\ 

Instructions  pertaining  to  balance  sheet 13 

Balance-sheet  accounts 13 

Cost  or  book  value  of  securities  owned 13 

Reacquired  securities 13 

Discount  and  premium  on  capital  stock 13 

Discount,  expense,  and  premium  on  funded  debt 14 

Contingent  assets  and  liabilities 15 

Text  explanatory  of  balance-sheet  accounts 16 

Fixed  capital  accounts 31 

Instructions  pertaining  to  fixed  capital  accounts 32 

Fixed  capital  defined 32 

Costs  to  be  actual  money  costs 33 

Interest  accruing  during  construction  period 33 

C-oet  of  labor,  materials,  and  supplies 33 

Plant  and  equipment  and  other  property  purchased 33 

Fixed  capital  withdrawn  or  retired 34 

Texts  explanatory  of  fixed  capital  accounts 3$ 

Income  statement 45 

Instructions  pertaining  to  the  income  statement 47 

Income  account  defined 47 

Taxes 47 

Text  explanatory  of  accounts  in  income  statement 48 

Corporate  surplus  or  deficit  account 5^ 

Instructions  pertaining  to  corporate  surplus  or  deficit  account. .  56 

Corporate  surplus  or  deficit  account  defined 56 

Text  explanatory  of  corporate  surplus  or  deficit  account 57 

Operating  revenue  accounts 60 

Instructions  pertaining  to  operating  revenue  accounts 60 

Operating  revenues  defined 60 

Deductions  from  revenues 60 

Commissions gA 

(3)'"*'" 


Text  explanatory  of  operating  revenue  accounts 61 

Operating  expense  accounts ^4 

Instructions  pertaining  to  operating  expense  accounts 66 

Repairs  defined gg 

Cost  of  repairs g7 

Depreciation  of  plant  and  equipment 67 

Extraordinary  casualties  and  unanticipated  reconstruction.  68 

Joint  operating  expenses gg 

Text  explanatory  of  operating  expense  accounts 69 

Clearing  accounts 77 


V 


ill 


At  a  General  Session  of  the  INTERSTATE  COMMERCE 
COMMISSION,  held  at  its  office  in  Washington,  D.  C, 
on  the  10th  day  of  December,  1912. 

The  subject  of  a  Uniform  System  of  Accounts  to  be 
prescribed  for  and  kept  by  telephone  companies  being 
under  consideration,  the  following  order  was  entered : 

It  is  ordered^  That  the  Uniform  System  of  Accounts  for 
Telephone  Companies  vnih.  the  text  pertaining  thereto, 
embodied  in  printed  form  to  be  hereafter  known  as  First 
Issue,  a  copy  of  which  is  now  before  this  Commission,  be, 
and  the  same  is  hereby,  appro  v^ed;  that  a  copy  thereof 
duly  authenticated  by  the  Secretary  of  the  Commission 
be  filed  in  its  archives,  and  a  second  copy  thereof,  in  like 
manner  authenticated,  in  the  office  of  the  Di\rision  of 
Carriers'  Accounts;  and  that  each  of  said  copies  so  au- 
thenticated and  filed  shall  be  deemed  an  original  record 
thereof. 

It  is  further  ordered ^  That  the  said  Uniform  System  of 
Accounts  for  Telephone  Companies  with  the  text  per- 
taining thereto,  be,  and  the  same  is  hereby,  prescribed 
for  the  use  of  telephone  companies  having  annual 
operating  revenues  exceeding  $50,000,  subject  to  the  pro- 
visions of  the  act  to  regulate  commerce  as  amended,  in 
the  keeping  and  recording  of  their  accounts;  that  each 
and  every  such  carrier  and  each  and  every  receiver  or 
operating  trustee  of  any  such  carrier  be  required  to  keep 
all  accounts  in  conformity  therewith ;  and  that  a  copy  of 
the  said  First  Issue  be  sent  to  each  and  every  such  carrier 
and  to  each  and  every  receiver  or  operating  trustee  of  any 
such  carrier. 

It  is  further  ordered,  That  any  such  carrier  or  any 
receiver  or  operating  trustee  of  any  such  carrier  may  sub- 
dinde  any  primary  account  in  the  said  First  Issue  estab- 
lished (as  permitted  in  the  general  instructions  contained 

(5) 


in  the  said  First  Issue) ;  or  may  malce  assignment  of  the 
amount  charged  to  any  such  primary  account  to  operat- 
ing didsions,  to  its  individual  lines,  or  to  States:  Pro- 
videdj  however,  That  such  subprimary  accounts  set  up 
or  such  assignments  made  by  any  such  carrier  or  by  any 
receiver  or  operating  trustee  of  any  such  carrier  do  not 
impair  the  integrity  of  the  accounts  hereby  prescribed. 

It  is  farther  ordered,  That  in  order  that  the  basis  of 
comparison  with  previous  years  be  not  destroyed,  any 
such  carrier  or  any  receiver  or  operating  trustee  of  any 
such  carrier  may,  during  the  twelve  months  from  the 
time  that  the  said  First  Issue  becomes  effective,  keep  and 
maintain,  in  addition  to  the  accounts  hereby  prescribed, 
such  portion  or  portions  of  its  present  accounts  as  may  be 
deemed  desirable  by  any  such  carrier,  or  by  any  receiver 
or  operating  trustee  thereof,  tor  the  purpose  ot  such  com- 
parison; or,  during  the  same  period,  may  mamtain  such 
groupings  of  the  primary  accounts  hereby  prescribed  as 
may  be  desired  for  that  purpose. 

It  is  further  ordered.  That  any  such  carrier  or  any 
receiver  or  operating  trustee  ot  any  such  carrier,  m 
addition  to  the  accounts  hereby  prescribed,  may  unless 
otherwise  ordered,  keep  any  temporary  or  experimental 
accounts  the  purpose  of  which  is  to  develop  the  efficiency 
of  operation :  Provided,  however,  That  such  temporary  or 
experimental  accounts  shall  not  impair  the  integrity  of 
any  primary  account  hereby  prescribed. 

It  is  further  ordered,  That  January  1,  1913,  be,  and  is 
hereby,  fixed  as  the  date  on  which  the  said  First  Issue 
of  the  Uniform  System  ot  Accounts  tor  Telephone  Com- 
panies shall  become  effective. 

By  the  Commission: 

John  H.  Marble, 

Secretary. 


i 


INTRODUCTORY  LETTER. 


Interstate  Commerce  Commission, 

Division  of  Carriers'  Accounts, 

Washington,  December  10,  1912, 

To  Telephone  Companies: 

This  Uniform  System  of  Accoimts  for  Telephone  Com- 
panies is  issued  in  accordance  with  an  order  of  the  Inter- 
state Commerce  Commission,  the  text  of  which  immedi- 
ately precedes  this  letter.  The  act  to  regulate  commerce, 
as  amended,  invests  the  Commission  with  authority  to 
prescribe  the  forms  of  accoimts  to  be  kept  by  telephone 
companies  subject  to  the  act,  and  prohibits  the  use  of 
any  accounts  other  than  those  prescribed  by  the  Commis- 
sion. The  observance  of  the  rules  and  regulations  stated 
in  this  system  of  accounts  therefore  becomes  obligatory 
upon  persons  having  direct  charge  of  the  accounts  of  the 
companies  concerned,  and  such  persons  will  be  held  re- 
sponsible for  their  proper  application. 

In  formulating  this  system  of  accounts  it  has  been  the 
endeavor  of  the  Division  of  Carriers'  Accounts  to  enlist 
the  cooperation  of  the  various  telephone  companies 
throughout  the  United  States.  For  that  purpose  Ac- 
counting Series  Circular  No.  30,  containing  a  tentative 
system  of  accounts,  was  submitted  to  all  telephone  com- 
panies of  which  there  was  record  for  criticisms  and  sug- 
gestions, and  due  consideration  was  given  to  all  criticisms 
and  suggestions  received. 

Attention  is  directed  to  the  fact  that  this  system  of 
accounts  applies  only  to  companies  having  annual  operat- 
ing revenues  exceeding  $50,000;  that  such  companies  are 
divided  into  two  classes,  according  to  their  earning  ca- 
pacity (see  par.  1,  p.  9),  and  that  it  has  been  sought 

(7) 


8 

to  provide  classifications  of  accounts  for  each  class, 
adjusted  to  their  respective  needs.  No  system  of  ac- 
counts has  yet  been  prescribed  for  companies  having 
annual  operating  revenues  of  $50,000  or  less. 

Accounting  officers  are  invited  to  correspond  with  this 
office  should  question  arise  with  regard  to  the  correct 
interpretation  of  any  accoimt  or  rule  herein  prescribed, 
in  order  that  uniformity  may  be  secured  in  the  applica- 
tion of  the  provisions  of  the  classifications. 

Charles  A.  Lutz, 
Chief  ExamiTier  of  Accounts. 


-I 


i 


GENERAL  INSTRUCTIONS. 

1.  Telephone  companies  divided  into  two  classes. — For  the  pur- 
pose of  this  system  of  accounts,  the  telephone  companies  affected  by 
the  preceding  order  are  divided  into  two  classes,  as  follows: 

Class  A. — Companies  having  average  annual  operating  revenues  * 
exceeding  $250,000. 

Class  B. — Companies  having  average  annual  operating  revenues  * 
exceeding  $50,000,  but  not  more  than  $250,000. 

Two  schemes  of  accounts,  designed  to  meet  the  respective  needs 
of  companies  of  classes  A  and  B,  indicated  above,  are  provided.  The 
classifications  for  the  two  classes  of  companies  are  published  jointly, 
with  the  titles  of  the  accounts  printed  in  CAPITALS  and  small 
CAPITALS,  and  in  italics. 

Class  A  companies  shall  keep  all  the  accounts  (so  far  as  they  may  be 
applicable  to  their  affairs)  the  titles  of  which  are  printed  in  CAPITALS 
and  SMALL  CAPFTALS  and  also  the  accounts  the  titles  of  which  are 
printed  in  italics^  except  that  where  an  account  shown  in  CAPITALS 
and  SMALL  CAPFTALS  is  subdivided  into  accounts  the  titles  of  which  are 
printed  in  italics,  it  is  not  required  that  the  former  be  kept.  Class  A 
companies  may  further  subdivide  any  of  the  accounts  prescribed 
herein,  provided  that  such  subdivisions  do  not  impair  the  integrity  of 
any  of  the  accounts  prescribed. 

Class  B  companies  shall  keep  all  the  accounts  (so  far  as  they  may 
be  applicable  to  their  affairs)  the  titles  of  which  are  .printed  in 
CAPITALS  and  small  capfials.  \Miere  such  accounts  are  subdi- 
vided into  accounts  the  titles  of  which  are  printed  in  italics,  it  is  not 
required  that  class  B  companies  shall  keep  separate  accounts  for  the 
latter.  Class  B  companies  may,  if  they  so  desire,  keep  the  more 
extended  accounts  prescribed  for  class  A  companies,  or  may  further 
subdivide  such  accounts,  provided  that  such  subdivisions  do  not 
impair  the  integrity  of  any  of  the  accounts  prescribed. 

2.  Accounts  should  show  fixed  capital,  operating  revenues,  and  oper- 
ating expenses  pertaining  solely  to  any  exchange  or  toll  system  or  com- 
mon to  two  or  more  systems. — (a)  Telephone  companies  should  keep 
their  fixed  capital  accounts  in  such  manner  as  will  enable  them  to  show, 

*  In  order  that  frequent  changes  may  be  avoided,  companies  operating  established 
telephone  plants  may  adopt  the  scheme  of  accounts  indicated  by  the  average  of  their 
annual  revenues  for  three  years  preceding  the  date  of  this  order.  If  at  the  close  of  any 
fiscal  year  the  average  of  the  annual  revenues  for  the  three  preceding  years  is  greater 
than  the  amount  given  for  the  class  in  which  the  company  has  been  put,  the  higher 
scheme  of  accounts  should  be  adopted.  New  companies  should  estimate  the  amount  of 
their  annual  revenues  and  adopt  the  scheme  of  accounts  provided  for  companies  with 
avflrage  annual  revenues  equal  to  the  amount  of  the  estimate. 

(9) 

72528*— 15 2 


10 

when  80  required  by  the  Commission,  (1)  the  cost  of  fixed  capital 
devoted  solely  to  any  exchange  system,  (2)  the  cost  of  fixed  capital 
devoted  solely  to  any  toll  system,  and  (3)  the  cost  of  fixed  capital  used 
in  common  by  two  or  more  exchange  or  toll  systems. 

(6)  The  Classification  of  Operating  Revenues  provides  separate  ac- 
counts for  exchange  revenue  and  for  toll  revenue.  WTiere  it  is  neces- 
sary to  apportion  the  revenue  between  these  accounts  telephone  com- 
panies should  be  prepared,  when  so  required  by  the  Commission,  to 
furnish  the  basis  used  in  making  such  apportionment. 

(c)  Telephone  companies  should  keep  their  operating  expense  ac- 
counts in  such  manner  as  will  permit  them  to  show,  when  so  required 
by  the  Commission,  (1)  the  operating  expenses  pertaining  solely  to 
any  exchange  system,  (2)  the  operating  expenses  pertaining  solely 
to  any  toll  system,  and  (3)  the  operating  expenses  which  are  common 
to  two  or  more  exchange  or  toll  systems. 


^v 


J 


i 


11 


BALANCE-SHEET  STATEMENT. 

ASSET  AOOOUNTS. 

Permanent  and  Long  Term  Investments —  Page. 

100.  Fixed  Capital  Instau^ed  Prior  to  January  1,  1913...  16 

101.  Fixed  Capital  Installed  Since  December  31,  1912 —  16 

102.  Reserve  for  Accrued  Deprecla.tion — Cr 16 

103.  Reserve  for  Amortization  op  Intangible  Capital — Cr.  17 

104.  Construction  Work  in  Progress 17 

105.  Investment  Securities 17 

106.  Stocks  of  System  Corporations 18 

107.  Funded  Debt  of  System  Corporaiwtis 18 

108.  Miscellaneous  Stocks -• 18 

109.  Miscellaneous  Funded  Debt 18 

110.  Advances  to  System  Corporations  for  Construction, 

Equipment,  and  Betterments 18 

111.  Miscellaneous  Investments 18 

Working  Assets — 

112.  Cash  and  Deposits 18 

113.  Cash 19 

114.  Special  Deposits 19 

115.  Employees'  Working  Funds 19 

116.  I^Urketable  Securities 19 

117.  Bills  Receivable 19 

118.  Due  from  Subscribers  and  Agents 20 

119.  Accounts  Receivable  from  System  Corporations 20 

120.  Miscellaneous  Accounts  Receivable 20 

121.  Matured  Interest  and  Dividends  Receivable 20 

122.  Materla-is  and  Supplies 20 

123.  Other  Current  Assets 21 

Accrued  Income  not  Due — 

124.  Unmatured  Interest,  Dividends,  and  Rents  Receiv- 

able   21 

Deferred  Debit  Items — 

125.  Sinking  Fund  Assets 21 

126.  Insurance  and  Other  Reserve  Fund  Assets 22 

127.  Provident  Fund  Assets 22 

128.  Prepayments 22 

129.  Prepaid  Rents 22 

130.  Prepaid  Taxes 22 

131.  Prepaid  Insurance 23 

132.  Prepaid  Directory  Expense 23 

133.  Other  Prepayments 23 

134.  Unextinguished  Discount  on  Capital  Stock 23 

135.  Unamortized  Debt  Discount  and  Expense 23 

136.  Other  Suspense 23 

Corporate  Deficft — 

137.  Corporate  Deficit 23 


12 


LIABILITY  AOOOUBTS. 
Stock—  Page. 

150.  Capital  Stock 24 

151.  Stock  Liability  for  Conversion  of  Securities 24 

152.  Premiums  on  Capi-^al  Stock 25 

Long  Term  Debt — 

153.  Funded  Debt 26 

154.  Receivers'  Certificates 26 

155.  Advances  from  System  Corporations  for  Construc- 

tion, Equipment,  and  Betterments 26 

Working  Liabilities — 

156.  Judgments  Unpaid 26 

157.  Bills  Payable 27 

158.  Audited  Vouchers  And  Wages  Unpaid 27 

159.  Subscribers'  Deposits 27 

160.  Accounts  Payable  to  System  Corporations 27 

161.  Miscellaneous  Accounts  Payable 27 

162.  Matured  Interest,  Dividends,  and  Rents  Unpaid '27 

163.  Matured  Funded  Debt  Unpaid 27 

164.  Service  Billed  in  Advance 27 

165.  Other  Current  Ll^bilities 28 

Accrued  Lla-bilities  not  Due — 

166.  Taxes  Accrued 28 

167.  Other  Accrued  Liabilities  not  Due 28 

Deferred  Credit  Items — 

168.  Unextinguished  Premium  on  Debt 28 

169.  Insurance  and  Casualty  Reserves 28 

170.  Llability  on  Account  op  Provident  Funds 29 

Appropriated  Surplus — 

171.  Surplus  Invested  Since  December  31,  1912,  in  Fixed 

Capital 29 

172.  Surplus  Invested  in  Sinking  Funds 29 

173.  Other  Surplus  Reserved 30 

Corporate  Surplus — 

174.  Corporate  Surplus  Unappropriated 80 


aX 


-^1 


II  4 


< 


13 


INSTRUCTIONS  PERTAINING  TO  BALANCE  SHEET. 

3.  Balance-sheet  accounts. — By  balance-sheet  accounts  are  meant 
those  titles  under  which  the  ledger  accounts  are  combined  and  sum- 
marized to  show  the  assets,  liabilities,  and  profit  or  loss  of  the  business 
at  a  given  time.  Where  the  title  and  definition  of  a  balance-sheet 
account  clearly  indicate  that  it  is  a  summary  of  other  accounts,  it  is 
not  required  that  a  special  ledger  account  shall  be  raised  under  such  a 
title  to  include  the  balance  from  the  accounts  usually  carried  on  the 
ledger. 

4.  Cost  or  book  value  of  securities  owned. — The  term  cost  or  book 
value,  as  applied  to  various  accounts  representing  securities  owned,  is 
intended  to  recognize  the  option  of  the  company  of  carrying  its  invest- 
ments in  securities  either  at  cost  or  at  a  reasonable  valuation  other  than 
cost.  Whenever  securities  are  acquired  they  are  to  be  entered  on  the 
books  at  cost.  If,  subsequently,  the  company  desires  to  adjust  their 
value  on  account  of  substantial  appreciation  or  depreciation,  tTie 
entries  in  its  books,  with  respect  to  such  securities,  as  well  as  its  annual 
reports  to  the  Commission,  should  clearly  show  the  reasons  for 
making  the  adjustments. 

5.  Beacquired  securities. — The  capital  stock  and  funded  debt  lia- 
bility accounts  in  the  balance  sheet  are  intended  to  include  only  the 
par  value  of  such  capital  stock  or  funded  debt  securities  as  have  been 
actually  issued  to  bona-fide  holders  for  value  or  such  securities  as  have 
been  issued  by  other  companies  and  have  been  assumed  by  the  account- 
ing company  and  are  actually  outstanding  at  the  date  of  the  balance- 
sheet  statement. 

When  capital  stock  or  funded-debt  securities  have  been  actually 
issued  to  bona-fide  holders  for  value  (or  after  such  issue  by  another 
company  have  been  assumed  by  the  accounting  company)  and  after 
such  issue  (or  assumption)  have  been  reacquired  by  the  company 
under  circumstances  which  require  that  they  shall  not  be  treated  as 
paid  or  retired,  they  may  be  charged  at  par  value  to  the  appropriate 
asset  account,  but  on  the  balance-sheet  statement  they  should  be  shown 
separately  as  a  deduction  from  both  the  asset  and  liability  accounts  in 
order  that  the  asset  accounts  for  securities  owned  will  include  only 
securities  of  other  companies  and  that  the  liability  accounts  for  securi- 
ties issued  or  assumed  will  include  only  those  in  the  hands  of  the  public. 

If  any  such  securities  are  reacquired  for  more  or  less  than  their  par 
value,  the  difference  between  the  par  value  and  the  cost  of  reacquire- 
ment,  after  adjusting  any  amounts  carried  in  the  discount-and-premium 
accounts  or  other  accounts  with  respect  to  such  securities,  should  be 
debited  or  credited  to  Corporate  Surplus  or  Deficit  account,  unless 
reacquired  for  a  sinking  or  other  fund,  which  is  required  to  be  repre- 
sented by  a  reserve,  in  which  case  the  difference  should  be  debited  or 
credited  to  the  appropriate  reserve  account. 

6.  Discount  and  Premium  on  Capital  Stock. — Ledger  accounts 
should  be  provided  to  cover  the  discounts  and  premiums  on  each  class 


14 

of  capital  stock  issued  or  assumed  by  the  company.  By  discount  is 
meant  the  excess  of  the  par  value  of  stocks  issued  or  assumed  over  the 
actual  money  value  of  the  c  >nsideration  received  for  such  stock  (except 
stock  that  has  been  sold  and  reacquired);  by  premium  is  meant  the 
excess  of  the  actual  money  value  of  the  consideration  received  for 
stock  issued  or  assumed  over  the  par  value  of  such  stock  (except  stock 
that  has  been  sold  and  reacquired).  Entries  in  these  accounts  repre- 
senting discounts  should  be  carried  therein  until  offset,  (1)  by  premiums 
realized  on  subsequent  sales  of  the  same  class  of  stock,  (2)  by  tinmim 
ments  levied  on  the  stockholders,  (3)  by  appropriations  of  surplus  for 
that  purpose,  or  (4)  by  charges  to  Corporate  Surplus  or  Deficit  account 
upon  reacquirement  or  retirement  of  the  stock.  Entries  in  theae 
accounts  representing  premiums  realized  should  be  carried  perma- 
nently, unless  offset  (1)  by  discounts  suffered  on  sales  of  the  same  class 
of  stock  or  (2)  by  credits  to  Corporate  Surplus  or  Deficit  account  upon 
reacquirement  or  retirement  of  the  stock. 

If  the  net  of  the  balances  in  the  discount-and-premium  accounts  for 
all  classes  of  capital  stock  sold  or  exchanged  is  a  debit  balance,  the 
amount  should  be  included  in  the  balance-sheet  statement  in  account 
No.  134,  '* Unextinguished  Discount  on  Capital  Stock";  if  a  credit 
balance,  the  amount  should  be  shown  in  account  No.  152,  *  'Premiums 
on  Capital  Stock." 

In  no  case  should  discount  on  capital  stock  be  charged  to  or  included 
in  any  account  as  a  part  of  the  cost  of  acquiring  any  property,  tangible 
or  intangible,  or  as  a  part  of  the  cost  of  operation. 

7.  Discount,  Expense,  and  Premium  on  Funded  Debt. — Ledger 
accounts  should  be  provided  to  cover  the  discount,  expense,  and 
premiums  on  each  class  of  funded  debt  issued  or  assumed  by  the  com- 
pany. By  discount  is  meant  the  excess  of  the  par  value  of  funded-debt 
securities  issued  or  assumed,  and  the  accrued  interest  thereon,  over 
the  actual  cash  value  of  the  consideration  received  for  such  securities 
(except  securities  that  have  been  sold  and  reacquired);  by  premium 
is  meant  the  excess  of  the  actual  cash  value  of  the  consideration  received 
for  funded-debt  securities  issued  or  assumed  over  the  par  value  of  such 
securities  and  the  accrued  interest  thereon  (except  securities  that  have 
been  sold  and  reacquired). 

By  expense  is  meant  all  expenses  in  connection  with  the  issue  and 
sale  of  evidences  of  debt,  such  as  fees  for  drafting  mortgages  and  trust 
deeds,  fees  and  taxes  for  recording  mortgages  and  trust  deeds,  cost  of 
engraving  and  printing  bonds,  certificates  of  indebtedness,  and  other 
commercial  paper  ha\dng  a  life  of  more  than  one  year;  fees  paid  trus- 
tees provided  for  in  mortgages  and  trust  deeds;  fees  and  commissions 
paid  under\vriter8  and  brokers  for  marketing  such  evidences  of  debt 
and  other  like  expense. 

If  the  net  balance  in  any  of  these  accounts  is  a  debit,  there  should 
be  charged  to  income  accoimt  No.  338,  *' Amortization  of  Debt  Dis- 
count and  Expense,"  during  each  fiscal   period   (and   crediteti   to 


^       ^v 


4 


15 


the  discount  and  premium  accounts  in  which  the  discount  and  ex- 
pense is  carried)  such  proportion  of  the  discount  and  expense  on 
the  outstanding  funded  debt  obligations  as  may  be  applicable  to  that 
period.  This  proportion  should  be  determined  according  to  a  rule, 
the  uniform  application  of  which  throughout  the  interval  between 
the  date  of  sale  and  the  date  of  maturity,  will  extinguish  the  dis- 
count and  expense  on  the  funded  debt.  The  charge  to  Income  for  any 
period  shall  not  exceed  the  proportion  applicable  to  that  period,  and 
a  charge  should  be  made  for  each  period  so  long  as  any  portion  of  the 
discount  and  expense  remains  imextinguished.  In  order  that  the 
discount  and  expense  may  be  extinguished  sooner,  the  company  may, 
at  its  option,  charge  to  Corporate  Surplus  or  Deficit  account  all  or  any 
portion  of  the  discount  and  expense  on  funded  debt  remaining  at  any 
time  unextinguished. 

If  the  net  balance  in  any  of  these  accounts  is  a  credit  there  should  be 
credited  to  income  account  No.  339,  "Release  of  Premiums  on  Debt — 
Cr.,"  during  each  fiscal  period  (and  debited  to  the  discount  and  pre- 
mium accounts  in  which  the  premium  is  carried)  such  proportion  of  the 
premium  on  outstanding  funded  debt  obligations  as  may  be  applicable 
to  that  period.  This  proportion  should  be  determined  according  to 
a  rule,  the  imiform  application  of  which  throughout  the  interval 
between  the  date  of  sale  and  the  date  of  maturity  of  the  debt,  will 
extinguish  the  premium  at  which  such  debt  was  sold. 

If  the  net  of  the  balances  in  the  discount  and  premium  accounts  for 
all  classes  of  funded  debt  sold  or  exchanged  is  a  debit  balance,  the 
amount  should  be  included  in  account  No.  135,  **  Unamortized  Debt 
Discount  and  Expense;"  if  a  credit  balance,  the  amount  should  be 
included  in  account  No.  168,  '* Unextinguished  Premium  on  Debt." 

Except  as  provided  in  section  11,  page  33,  no  discount  and  expense 
on*  funded  debt  should  be  charged  to  or  included  in  any  account  as  a 
part  of  the  cost  of  acquiring  any  property,  tangible  or  intangible,  or  as 
a  part  of  the  cost  of  operation, 

8.  Contingent  assets  and  liabilities. — Contingent  assets  and  liabili- 
ties should  not  be  included  in  the  body  of  the  balance-sheet  statement, 
but  should  be  shown  in  detail  in  a  supplementary  statement  accom- 
panying the  balance-sheet  statement.  Contingent  assets  represent 
possible  sources  of  value  contingent  upon  the  fulfillment  of  conditions 
regarded  as  uncertain.  Contingent  liabilities  include  items  which  may, 
imder  certain  conditions,  become  obligations  of  the  company,  but  are 
neither  direct  nor  assumed  obligations  on  the  date  of  the  balance  sheet. 


TEXT  EXPLANATORY  OF  BALANCE-SHEET  ACCOUNTS. 


ASSET  AGGOUirrS. 


101 


102 


PERMANENT  AND  LONG  TERM  INVESTMENTS. 

100.  Fixed  Capital  Installed  Prior  to  January  1,  1913.» 

In  this  account  (on  the  balance-sheet  statement)  should  be 
shown  the  total  of  the  balances  in  the  ledger  accounts  repre- 
senting the  company's  fixed  capital,  which  was  installed  prior 
to  January  1,  1913,  and  which  is  still  in  service  at  the  date  of 
the  balance  sheet.  (See  text  of  this  account  on  p.  36.) 
Fixed  Capftal  Installed  Since  December  31,  1912.* 

In  this  account  (on  the  balance-sheet  statement)  should  be 
shown  the  total  of  the  balances  in  the  ledger  accounts  represent- 
ing the  company's  fixed  capital  which  has  been  insUlled  since 
December  31,  1912,  and  which  is  still  in  service  at  the  date  of 
the  balance  sheet.  (See  text  of  this  account  on  p.  36.) 
Reserve  for  Accrued  Depreciation — Cr.* 

Credit  to  this  account  such  amounts  as  are  concurrently 
charged  to  account  No.  608,  "Depreciation  of  Plant  and  Equip- 
ment," No.  701,  ''Shop  Expense,"  No.  702,  "Stable  and  Garage 
Expense,"  and  No.  703,  "Tool  Expense,"  to  cover  the  expense 
of  depreciation  of  plant,  equipment,  furniture,  tools  and  imple- 
ments, as  specified  in  the  text  of  these  accounts.  This  account 
should  also  be  credited  with  any  amount  carried  in  reserve  on 
January  1,  1913,  to  cover  the  expense  of  depreciation  on  plant, 
equipment,  furniture,  tools  and  implements  installed  prior  to 
that  date. 

Charge  to  this  account  the  realized  depreciation  of  tangible 
fixed  capital  installed  since  December  31,  1912,  when  such  cap- 
ital is  relinquished,  retired,  or  destroyed,  also  the  amount  of 
depreciation  carried  herein  in  respect  to  tangible  fixed  capital 
installed  prior  to  January  1,  1913,  when  relinquished,  retired, 
or  destroyed.    (See  sees.  14,  p.  34,  and  23,  p.  67.) 

Charge  also  to  this  account  Buch  part  of  the  expenditures  for 
extraordinary  repairs  as  is  concurrently  credited  to  accoimt 
No.  611,  "Repairs  Charged  to  Reserves— Cr." 


>  The  total  of  accounts  Nos.  100  and  101  should  be  drawn  down  on  the  balance-sheet 
statement,  and  the  total  of  accounts  Nos.  102  and  103  deducted  thenfrom,  th« 
difference  being  shown  as  the  net  total. 

(16) 


^v 


4 


17 

103.  Reserve  for  Amortization  op  Intangible  Capital — Cr.* 

Credit  to  this  account  such  amounts  as  are  concurrently 
charged  to  account  No.  340,  "Amortization  of  Landed  Capital," 
and  to  account  No.  674,  "Amortization  of  Franchises  and  Pat- 
ents." Charge  to  this  account  when  any  franchise,  patent,  or 
landed  capital  expires  or  is  relinquished,  the  amount  at  which 
it  stood  charged  in  the  company's  fixed  capital  accounts  or  such 
portion  thereof  as  has  been  previously  credited  to  this  reserve. 
When  any  intangible  capital  acquired  pri9r  to  the  raising  of  this 
reserve  expires  or  is  relinquished,  that  portion  of  its  cost  which 
has  not  been  covered  by  credits  to  this  account  or  previously 
writiten  off  should  be  charged  to  account  No.  414,  "Amortization 
Unprovided  for  Elsewhere." 

104.  Construction  Work  in  Progress. 

This  account  should  include  the  amoimts  expended  upon 
plant  that  is  in  process  of  construction  under  estimates  or  work 
orders,  but  is  not  ready  for  service  at  the  date  of  the  balance 
sheet.  It  includes  interest  charged  to  construction,  also  such 
proportion  of  plant  supervision  expenses,  engineering  expenses, 
tool  expenses,  supply  expenses,  and  general  expenses  as  may  be 
properly  chargeable  to  the  construction  work  included  under 
this  account. 

When  the  work  is  completed  on  any  job  the  cost  of  which  has 
been  included  in  this  account,  this  account  should  be  credited 
with  the  amount  at  which  it  stands  charged,  and  the  appropriate 
fixed  capital  or  other  accounts  should  be  concurrently  charged, 
but  expenditures  should  not  be  carried  in  this  account  beyond 
the  close  of  the  fiscal  year  next  succeeding  that  in  which  the 
expenditures  were  made. 
106.  Investment  Securfties. 

This  account  should  include  the  cost  or  book  value  of  stocks, 
bonds,  and  other  evidences  of  indebtedness  (including  notes 
having  dates  of  maturity  of  more  than  one  year  from  date  of  issue) 
held  by  the  accounting  company,  and  pledged  as  collateral  for 
other  securities  issued  or  assumed,  or  held  as  a  means  of  obtain- 
ing or  exercising  control  over  other  corporations,  for  devotion  to 
future  operations,  or  for  securing  other  business  advantages. 

In  stating  this  account  or  the  subaccounts  provided  hereunder 
on  the  balance-sheet  statement  the  par  value  of  securities  issued 
or  assumed  by  the  accounting  company  and  carried  in  this 
account  should  be  deducted  in  order  that  this  account  will 
show  only  the  cost  or  book  value  of  securities  of  other  companies. 
(See  sec.  5,  p.  13.) 


»  The  total  of  accounts  Nos.  100  and  101  should  be  drawn  down  on  the  balance-sheet 
stetement,  and  the  total  of  accounts  Nos.  102  and  103  deducted  therefrom,  the 
difference  being  shown  as  the  net  total. 

72528"— 15 3 


\ 


18 

The  following  subaccounts  should  be  kept  by  class  A  com- 
panies: 

106.  Stocks  of  System  Corporations.^ 

107.  Funded  Debt  of  System  Corporations .^ 

108.  Miscellaneous  Stocks. 

109.  Miscellaneous  Funded  Debt. 

Note  A  .—Short-term  notes  payable  upon  demand  or  having  dates  of  matu- 
rity of  one  year  or  less  from  the  date  of  issue  should  not  be  included  herein 
but  in  account  No.  110,  "Advances  to  System  Corporations  for  Construction, 
Equipment,  and  Betterments,"  or  No.  117,  "Bills  Receivable,"  as  may  b« 
appropriate. 

Note  B. — In  the  annual  reports  of  class  A  and  class  B  telephone  companies 
to  the  Commission  investments  will  be  required  to  be  cla&sified  so  as  to  show 
those  held  subject  to  a  lien  of  some  character  and  those  held  free  of  all  lien  or 
pledge. 

110.  Advances    to    System    Corporations    for    Construction, 

Equipment,  and  Betterments. 

This  account  should  include  advances  to  controlling,  affili- 
ated, controlled,  and  subsidiary  corporations  to  enable  such  cor- 
porations to  pay  for  construction,  equipment,  or  additions  and 
betterments,  if  such  advances  are  of  a  permanent  nature  (i.  e., 
if  there  is  not  an  understanding  that  the  advances  are  to  be 
repaid  within  one  year)  or  if  it  is  understood  and  intended  that 
reimbursement  shall  be  made  by  the  issue  of  the  securities  of  the 
debtor  corporation. 

NoTK  A. — Gifts  to  system  corporations  made  without  expectation  of  reim- 
bursement should  be  included  in  account  No.  353,  "Miscellaneous  Appropri- 
ations from  Income,"  or  No.  416,  "Miscellaneous  Appropriations  of  Sur- 
plus" and  not  in  this  account. 

Note  B  .—Temporary  advances  on  open  accounts  to  system  corporations 
and  such  advances  for  purposes  other  than  construction,  equipment,  and 
betterments  should  be  included  in  account  No.  119,  "Accounts  Receivable 
from  System  Corporations." 

111.  Miscellaneous  Investments. 

This  account  should  include  investments  of  a  permanent 
nature  in  property  (tangible  or  intangible)  other  than  that  held 
for  the  operation  of  the  company's  plant  as  a  telephone  system. 
It  should  include  such  items  as  investments  in  lighting,  water, 
and  power  plants,  manufacturing  plants,  lands,  and  buildings 
and  other  property  not  a  part  of  the  company's  plant  for  tele- 
phone operations  or  of  facilities  incident  thereto. 
WORKING  ASSETS. 

112.  Cash  and  Deposits. 

This  account  includes  the  various  items  respecting  cash  and 
special  deposits  as  provided  in  the  following  subaccounts: 

I  By  a  system  corporation  Is  meant  any  controlling,  affiliated,  controlled,  or  subsidiary 
eorporation. 


19 


113.  Cash. 

This  account  should  include  the  amount  of  current  funds 
available  for  use  on  demand  in  the  hands  of  financial  officers 
and  agents,  or  deposited  in  banks  or  with  trust  companies,  and 
cash  in  transit  for  which  agents  receive  current  credit. 

114.  Special  Deposits. 

This  account  should  include  deposits  to  pay  declared  divi- 
dends and  matured  interest;  cash  realized  from  the  sale  of  securi- 
ties and  deposited  with  trustees  for  disbursement  when  the  pur- 
poses for  which  the  securities  are  sold  are  accomplished;  amounts 
realized  from  the  sale  of  property  and  deposited  with  trustees  other 
than  in  sinking  funds  until  the  property  is  replaced;  special  de- 
posits (in  other  than  sinking  funds)  for  the  payment  of  debta 
and  interest  not  matured;  money  and  securities  deposited  to  se- 
cure the  performance  of  contracts;  and  other  deposits  of  a  special 
nature  not  provided  for  elsewhere. 

In  stating  this  account  on  the  balance-sheet  statement  the 
amount  of  any  securities  issued  or  assumed  by  the  accounting 
company  and  included  herein  should  be  deducted  in  order  that 
this  account  will  show  only  the  assets  herein  other  than  the 
company's  own  securities.     (See  sec.  5,  p.  13.)  . 

115.  Employees'  Working  Funds. 

This  account  should  include  amounts  advanced  to  general  and 
special  agents,  and  other  officers  and  employees  as  working 
funds  from  which  certain  expenditures  are  to  be  made  and 
accounted  for. 

116.  Marketable  Securities. 

This  account  should  include  the  cost  or  book  value  of  securities 
held  in  the  company 's  treasury  unpledged  and  free  for  sale  and 
not  necessary  or  desirable  for  the  telephone  company  to  hold 
for  the  purpose  of  maintaining  the  integrity  of  its  telephone 
system. 

In  stating  this  account  on  the  balance-sheet  statement  the 
par  value  of  securities  issued  or  assumed  by  the  company  and 
carried  in  this  account  should  be  deducted  in  order  that  this 
account  may  show  only  the  cost  or  book  value  of  securities  of 
other  companies.     (See  sec.  5,  p.  13.) 

117.  Bills  Receivable. 

This  account  should  include  the  cost  of  all  collectible  obliga- 
tions in  the  form  of  bills  receivable  or  other  similar  evidences  of 
money  receivable  on  demand  or  within  a  time  not  exceeding 
one  year  (excluding  interest  coupons). 

Notb  a.— Notes  having  dates  of  maturity  of  more  than  one  year  after  date 
of  issue  should  not  be  included  in  this  account  but  in  account  No.  105, "  Invest- 
ment Securities"  or  No.  lift,  « Marketable  Securities." 

Note  B  .—When  loans  to  system  corporations  i  for  construction  purposes  are 
evidenced  by  demand  or  short-term  notes  intended  later  to  be  exchanged 
for  other  securities,  the  amount  of  cuch  loans  should  be  included  in  account 
No.  110,  "Advances  to  System  Corporations  for  Construction,  Equipment, 
and  Betterments." 


it'l 


20 

118.  Due  from  Subscribers  and  Agents. 

This  account  should  include  amounts  due  from  subscribers  for 
services  rendered  or  billed  and  from  agents  and  collectors  author- 
ized to  make  collections  from  subscribers. 

This  account  should  be  kept  in  such  manner  as  will  enable  the 
companies  to  make  the  following  analysis,  viz: 

(a)  Amounts  due  from  subscribers  who  are  still  receiving  tele- 
phone service. 

(6)  Amounts  due  from  subscribers  whose  telephone  service 
has  been  discontinued  and  whose  accounts  are  in  process  of  col- 
lection in  the  usual  way. 

(c)  Amounts  due  from  subscribers  whose  telephone  service 
has  been  discontinued  and  whose  accounts  are  in  litigation  cr 
otherwise  suspended. 

Credit  to  a  subaccount  hereunder  such  amounts  as  may  be  con- 
currently charged  to  account  No.  304,  "Uncollectible  Operating 
Revenues,"  to  provide  a  reserve  for  uncollectible  accounts  due 
from  subscribers  and  agents.  If  such  reserve  is  provided,  when 
any  bill  for  services  has  proved  impracticable  of  collection,  this 
subaccount  should  be  charged  and  the  account  in  which  the 
bill  is  carried  should  be  credited. 

119.  Accounts  Receivable  from  System   Corporations. 

This  account  should  include  amounts  due  from  controlling, 
affiliated,  controlled,  or  subsidiary  corporations  on  open  accounts 
other  than  those  provided  for  in  account  No.  110,  "Advances  to 
System  Corporations  for  Construction,  Equipment,  and  Better- 
ments." 

120.  Miscellaneous  Accounts  Receivable. 

This  account  should  include  all  amounts  owed  to  the  com- 
pany upon  accounts  with  solvent  concerns  (other  than  system  corw 
porations  and  subscribers  and  agents),  also  the  cost  of  all  accounts 
and  claims  (except  notes  or  negotiable  bills)  upon  which  respon- 
sibility is  acknowledged  by  solvent  concerns  or  which  are  suffi- 
ciently secured  to  be  considered  good,  and  of  all  judgments 
against  solvent  concerns  where  the  judgment  is  not  appealable 
or  suspended  through  appeal. 

Note.— Cash  on  deposit  in  banks  or  with  trust  companies  should  not  be 
included  in  this  account  but  in  account  No.  113,  "Cash,"  or  Na  114,  "Special 
Deposits." 

121.  Matured  Interest  and  Dividends  Receivable. 

This  account  should  include  all  interest  accrued  and  due  but  not 
yet  collected  upon  bonds,  notes,  or  other  commercial  paper  held 
by  or  for  the  benefit  of  the  company,  and  all  dividends  declared 
and  due  by  solvent  concerns  but  not  yet  collected,  the  right  to 
which  is  in  the  company. 

122.  Materlals  and  Supplies. 

This  account  should  include  the  cost  of  unapplied  material, 
including  the  value  of  material  temporarily  in  use  and  not  charged 


21 


4 


^ 

« 


out  in  the  company's  accounts;  articles  in  process  of  manufacture 
by  the  company;  tools,  fuel,  stationery,  and  other  supplies. 
Freight  and  express  charges  paid  on  material  included  in  this 
account  should  be  included  in  the  value  of  such  material. 

Where  discounts  recovered  through  prompt  payment  can  not 
be  credited  to  the  particular  bills,  the  cost  at  which  such  mate- 
rials and  supplies  should  be  charged  should  be  the  invoice  cost, 
and  any  discounts  recovered  through  prompt  payment  of  bills  for 
such  materials  and  supplies  should  be  credited  to  clearing  ac- 
count No.  704,  "Supply  Expense." 

When  any  tangible  fixed  capital  is  discontinued,  withdrawn, 
or  retired,  and  when  any  equipment,  materials,  and  supplies 
are  returned  to  store,  the  salvage  value  thereof  should  be  charged 
to  this  account,  regardless  of  whether  such  equipment,  materials, 
and  supplies  are  to  be  consumed  in  operation  or  in  construction, 
or  to  be  sold.  If  such  value  is  not  known  and  cannot  readily  be 
determined,  it  should  be  estimated,  and  errors  in  such  estimates, 
when  determined,  involved  during  the  year  in  which  the  esti- 
mates were  made,  should  be  adjusted  through  the  accounts 
involved;  if  later,  then  through  the  Corporate  Surplus  or  Deficit 
account. 

Inventories  of  materials  and  supplies  on  hand  and  unapplied 
should  be  taken  at  least  annually,  and  any  shortages  or  overages 
disclosed  by  such  inventories  should  be  credited  or  debited  to 
this  account  and  debited  or  credited  to  clearing  account  No.  704, 
'  *  Supply  Expense, ' '  in  case  such  shortages  or  overages  can  not  be 
assigned  to  specific  accounts. 

123.  Other  Current  Assets. 

This  account  should  include  the  cost  of  all  current  assets  which 
are  not  includible  under  any  of  the  foregoing  accounts.  By  cur- 
rent assets  are  meant  only  those  things  that  are  readily  con- 
vertible into  money  and  which  are  held  not  as  investments  but 
with  the  intent  of  being  presently  converted  into  money. 
ACCRUED  INCOME  NOT  DUE. 

124.  Unmatured  Interest,  Dividends,  and  Rents  Receivable. 

This  account  should  include  the  amount  of  interest  on  loans 
made  and  rents  under  leases  accrued  to  the  date  of  the  balance 
sheet,  but  not  due  or  collectible  until  after  that  date,  and  divi- 
dends declared  on  stocks  owned,  and  dividends  accrued  on  such 
stocks  when  contracts  require  that  the  dividends  be  paid  at 
stated  times. 
DEFERRED  DEBIT  ITEMS. 

125.  Sinking  Fund  Assets. 

This  account  should  include  the  amount  of  cash,  the  cost  or 
book  value  of  live  securities  of  other  companies,  the  par  value  of 
live  securities  issued  or  assumed  by  the  accounting  company, 
and  other  assets  which  are  in  the  hands  of  trustees  of  sinking 


22 

and  other  funds  for  the  purpose  ot  redeeming  outetanding  obli- 
gations; also  amounts  deposited  with  such  trustees  on  account 
of  mortgaged  property  sold.  A  separate  account  should  be 
raised  for  each  sinking  fund. 

In  stating  this  account  on  the  balance-sheet  statement  the 
par  value  of  any  securities  issued  or  assumed  by  the  company  and 
carried  in  this  account  should  be  deducted  from  the  total  in 
order  to  show  only  the  net  assets  in  sinking  funds  other  than 
the  company's  own  securities.     (See  sec.  5,  p.  13.) 

126.  Insurance  and  Other  Reserve  Fund  Assets. 

This  account  should  include  the  amount  of  cash,  the  cost  or 
book  value  of  securities  of  other  companies,  the  par  value  of  secu- 
rities issued  or  assumed  by  the  accounting  company,  and  other 
assets  in  the  hands  of  trustees  or  managers  of  insurance,  and 
other  funds  that  have  been  raised  and  specifically  set  aside  or 
invested  by  the  company  for  specific  purposes  (except  special 
deposits,  provident  funds,  and  sinking  funds  for  the  retirement 
of  obligations).  A  separate  account  should  be  raised  for  each 
fund. 

In  stating  this  account  on  the  balance-sheet  statement  the 
par  value  of  any  securities  issued  or  assumed  by  the  company 
and  carried  in  this  account  should  be  deducted  from  the  total  in 
order  to  show  only  the  net  assets  in  the  funds  other  than  the 
company's  own  securities.     (See  '^^c.  5,  p.  13.) 

127.  Provident  Fund  Assets. 

This  account  should  include  the  amount  of  cash,  and  the  cost 
or  book  value  of  securities  and  other  assets  in  the  hands  of  trustees 
or  managers  of  employees'  pension  fimds,  savings  funds,  relief, 
hospital,  and  other  association  funds  (whether  contributed  by 
the  company,  by  employees,  or  by  others),  when  such  trustees 
or  managers  are  acting  for  the  company  in  the  administration 
of  such  fimds.     (See  account  No.  170.) 

128.  Prepayments. 

This  account  should  include  the  balances  arising  from  the  pay- 
ment of  rents,  taxes,  insurance,  and  like  disbursements,  in 
advance  of  the  period  to  which  they  pertain,  as  defined  in  the 
following  subaccounts: 

129.  Prepaid  Rents. 

This  account  should  include  the  amount  of  rents  paid  in  ad- 
vance of  the  enjoyment  of  the  term.  As  the  term  is  consumed, 
credit  this  account  at  monthly  intervals  and  debit  the  appropriate 
rent  account  with  the  amount  applicable  to  the  month. 

130.  Prepaid  Taxes. 

This  account  should  include  the  exceae  ot  taxes  paid  over 
the  amount  properly  chargeable  to  Income  or  other  accoimts  as 
shown  by  the  debit  balance  in  the  Tax  Liability  account.  (See 
sec.  16,  p.  47.) 


i 


23 


131.  Prepaid  Insurance 

When  premiums  on  insurance  policies  are  paid  in  advance  of 
their  accrual,  the  amount  prepaid  shall  be  charged  to  this  ac- 
count. As  such  premiums  accrue,  they  should  be  credited  at 
monthly  intervals  to  this  account  and  charged  to  account  No. 
668,  "Insurance." 

132.  Prepaid  Directory  Expense. 

Charge  to  this  account  the  cost  of  preparing,  printing,  binding, 
and  dalivering  directories;  also  the  cost  of  soliciting  advertise- 
ments for  directories.  When  directories  are  issued,  this  accoimt 
should  be  credited  each  month  and  operating  expense  account 
No.  649,  "Directory  Expenses,"  should  be  charged  with  the 
proportion  of  the  cost  based  on  the  number  of  months  the  direc- 
tor>'  will  be  in  use. 

133.  Other  Prepayments. 

When  prepayments  are  made  for  anything  other  than  as  pro- 
•  vided  for  in  the  four  next  preceding  accounts,  the  amount  of 
such  prepayments  should  be  included  in  this  account. 

134.  Unextinguished  Discount  on  Capital  Stock. 

If  the  net  of  the  balances  in  the  discoimt  and  premium 
accounts  for  all  classes  of  capital  stock  sold  or  exchanged  is  a 
debit  balance,  the  amount  should  be  stated  in  this  accoimt. 
(See  sec.  6,  p.  13.) 

135.  Unamortized  Debt  Discount  and  Expense. 

If  the  net  of  the  balances  in  the  discount  and  premium 
accounts  for  all  classes  of  funded  debt  sold  or  exchanged  is  a 
debit  balance,  the  amount  should  be  stated  in  this  account. 
(See  sec.  7,  p.  14.) 

136.  Other  Suspense. 

This  account  should  include  all  debits  not  provided  for  else- 
where and  the  proper  final  disposition  of  which  is  uncertain. 
It  will  include  all  such  items  as  expense  of  preliminary  surveys, 
plans,  investigations,  etc.,  made  for  determining  the  feasibility  of 
projects  under  contemplation.  Should  any  such  project  later 
be  carried  to  completion,  such  amounts  should  be  credited  to 
this  account  and  charged  to  the  proper  fixed  capital  account  or 
accounts;  should  it  be  abandoned,  such  amounts  should  be 
charged  to  Corporate  Surplus  or  Deficit  account. 

This  account  should  also  include  the  amounts  carried  in 
suspense  due  to  extraordinary  casualties  and  unanticipated  re- 
construction.   (See  sec.  24,  p.  68.) 

When  the  proper  disposition  of  any  item  charged  to  this 
accoimt  is  determined,  it  should  be  credited  to  this  account  and 
charged  to  the  appropriate  accoimt  or  accounts. 
CORPORATE  DEFICIT. 

137.  Corporate  Deficft. 

Under  this  head  should  be  shown  the  debit  balajice,  if  any, 
in  the  Corporate  Surplus  or  Deficit  account.     (See  sec.  17,  p.  56.) 


1l  ■ 


•     24 

g^^j^  LIABILITT  ACOOUITTS. 

150.  Capital  Stock. 

This  account  should  include  the  par  value  of  stock  actually 
issued.  In  case  of  the  issue  of  two  or  more  classes  of  stock  a 
separate  account  should  be  provided  for  each  class.  Credit  to  a 
subaccount  entitled  "Instalhnents  on  Stock  Subscriptions,"  the 
amount  of  installments  paid  on  subscriptions  for  capital  stocks; 
when  certificates  of  stock  are  issued  for  instalhnents  paid,  this 
subaccount  should  be  cleared  and  the  par  value  of  the  stock  so 
issued  should  be  credited  to  the  account  appropriate  for  such 
stock. 

The  amounts  Included  in  this  account,  or  in  the  subaccounts, 
should  be  subdivided  so  as  to  show  (1)  the  par  value  of  certifi- 
cates issued  and  outstanding  and  not  held  by  the  company,  its 
agents  or  trustees,  and  (2)  the  par  value  of  certificates  (pledged 
or  unpledged)  issued  by  the  company  and  held  by  or  for  it. 
In  stating  the  accounts  on  the  balance-sheet  statement,  the  latter 
amount  should  be  deducted  from  the  total  in  order  to  show  only 
the  par  value  of  the  certificates  actually  outstanding  in  the  hands 
of  the  public  at  the  date  of  the  balance-sheet  statement.  (See 
sec.  5,  p.  13.) 

Note  A.— By  capital  stock,  as  the  term  is  here  used,  is  meant  those  securities 
which  represent  permanent  interests  in  the  corporation,  or  interests  which, 
If  terminable,  are  so  only  at  the  option  of  the  corporation.  Stocks  are  classi- 
fied as — 

Common  Hocks,  those  whose  claims  in  the  distribution  of  dividends  are  sub- 
ordinate to  the  claims  of  all  other  stocks. 

Pre/erred  stocks,  those  having  a  first  claim  upon  thOM  dividends  which  mar 
be  distributed. 

Debenture  stocks,  those  issued  under  a  contract  to  pay  a  specified  return  at 
specified  intervals. 

No  two  stocks  should  be  coaosidered  of  the  same  class  unless  they  are  equal 
in  their  dividend  or  interest  rights,  their  voting  rights,  and  the  conditioM 
under  which  they  may  be  retired. 

Note  B.— If  any  issue  of  stock  is  for  money,  that  fact  should  be  stated:  and 
if  for  any  consideration  other  than  money,  the  person  to  whom  issued  should 
be  designated,  and  the  consideration  for  which  issued  should  be  described 
with  sufficient  particularity  to  identify  it.  If  such  issue  is  to  the  treasurer  or 
other  agent  of  the  company,  to  be  by  him  disposed  of  for  the  benefit  of  the 
company,  that  fact  and  the  name  of  such  agent  should  be  shown;  and  such 
agent  should,  in  his  account  of  the  disposition  thereof,  show  the  like  details 
amceming  the  consideration  realized  thereon. 

Note  C— If  the  fair  cash  value  of  the  consideration  realized  upon  the  issue 
of  any  amount  of  stock  is  greater  or  less  than  the  par  value  of  such  stock  the 
difference  should  be  credited  or  charged  to  an  appropriate  discount  and 
premium  account,  and  corresponding  reference  thereto  should  be  contained  in 
the  entry  relating  to  such  stock  in  the  stock  account.    (8«e  me.  6,  p.  13.) 

151.  Stock  Liabiuty  for  Conversion  of  Secuiuties. 

Th is  account  should  include  the  par  value  of  stock  that  the  com- 
pany has  agreed  to  issue  in  exchange  for  securities  of  constituent 
companies  whose  physical  property  has  been  acquired  under 


25 


such  agreements,  but  whose  securities  have  not  yet  been  surren- 
dered for  exchange. 

152.  Premiums  on  CAPrrAL  Stock. 

If  the  net  of  the  balances  in  the  discounts  and  premiums 
accounts  for  all  classes  of  capital  stock  sold  or  exchanged  is  a 
credit  balance,  the  amount  should  be  stated  in  this  account. 
(See  sec.  6,  p.  13.) 
LONG  TERM  DEBT. 

153.  Funded  Debt. 

This  account  should  include  the  par  value  of  funded  debt 
actually  issued  or  assumed  by  the  company.  In  case  of  two  or 
more  classes  of  funded  debt  a  separate  account  should  be  provided 
for  each  class.  Credit  to  a  subaccoimt,  entitled  **  Installments 
on  Funded  Debt  Subscriptions,"  the  amount  of  installments  paid 
on  subscriptions  to  funded  debt  issues.  When  bonds,  notes,  or 
other  evidences  of  indebtedness  are  delivered,  this  subaccount 
should  be  cleared  and  the  par  value  of  the  funded  debt  so  issued 
should  be  credited  to  the  account  appropriate  for  such  funded 
debt.  The  entry  in  any  account  should  rfiow  also  the  purpose 
for  which  funded  debt  is  issued. 

The  amounts  included  in  this  account,  or  in  the  subaccounts, 
should  be  subdivided  so  as  to  show  (1)  the  par  value  of  funded 
debt  securities  issued  or  assumed  and  outstanding  and  not  held 
by  the  company,  its  agents  or  trustees,  and  (2)  the  par  value  of 
•  funded  debt  seciu-ities  (pledged  or  unpledged)  issued  or  assumed 
by  the  accounting  company  and  held  by  or  for  it.  In  stating 
the  accounts  on  the  balance-sheet  statement  the  latter  amount 
should  be  deducted  from  the  total  in  order  to  show  only  the  par 
value  of  funded  debt  securities  actually  outstanding  in  the  hands 
of  the  public  at  the  date  of  the  balance-sheet  statement.  (See 
sec.  5,  p.  13.) 

Note  A. — By  funded  debt,  as  the  term  is  here  used,  is  meant  the  pai  value  of 
all  bonds,  notes,  and  other  evidences  of  indebtedness  (except  ojjen  accounts  for 
advances)  which,  by  the  terms  of  the  creation  of  the  debt,  do  not  mature  tmtil 
more  than  one  year  after  the  date  of  such  creation.  Funded  debt  is  classified 
In  accordance  with  four  principal  characteristics,  viz,  (1)  mortgage  or  other 
lien  or  security  therefor;  (2)  rate  of  interest;  (3)  interest  dates;  and  (4)  date  of 
rtiaturity.  No  two  amounts  of  fimded  debt  should  be  considered  of  the  same 
class  unless  agreeing  in  all  four  of  the  above  characteristics,  except  that  any 
inue  of  securities  agreeing  in  the  first  three  characteristics  but  maturing 
serially  may  be  treated  as  of  the  same  class.  Where  any  portion  of  the  funded 
debt  rests  only  on  the  general  credit  of  the  corporation  and  is  not  specially 
secured  or  supported  by  lien  of  any  character,  it  should,  for  the  purpose  of  these 
accounts,  be  known  as  a  debenture.  Debentures  include  promissory  notes 
unsecured  by  mortgage  or  other  lien,  and  securities  commonly  known  as  plain 
bonds. 

Note  B.— If  the  consideration  received  for  any  issue  of  funded  debt  is  any- 
thLig  else  than  money,  the  entry  should  show  the  principal  to  whom  issued  and 
should  describe  with  sufficient  particularity  to  identify  it  the  consideration 
actually  received  for  the  issue.  If  the  issue  is  in  any  case  to  an  agent  of  an 
undbclosed  principal,  the  name  and  business  address  of  such  agent  and  the 
fact  of  his  agency  should  be  shown  in  the  entry. 

72528*— 15 1  ■» 


26 

NoTK  C— If  the  fair  cash  value  of  the  coDsideraticn  reallied  upon  the  issue 
of  any  amount  of  funded  debt  securities  is  greater  or  less  than  the  i»r  value  of 
such  securities  plus  the  accrued  interest,  the  difference  should  be  credited  or 
charged  to  an  appropriate  discount-and-premium  account,  and  corresponding 
reference  thereto  should  be  made  in  the  entry  relating  to  such  debt  in  the 
funded  debt  account.    (See  sec.  7,  p.  14.) 

154.  Receivers'  Certificates. 

When  any  receiver  acting  under  the  orders  of  a  court  of  com- 
petent jurisdiction  is  in  possession  of  the  property  of  the  com- 
pany and  under  the  orders  of  such  court  issues  certificates  of 
indebtedness  chargeable  upon  such  property,  the  par  value  of 
such  certificates  should  be  credited  to  this  account.  Interest 
accruing  upon  such  certificates  should  also  be  credited  monthly 
to  this  account,  and  when  paid  should  be  chained  to  this  account. 

155.  Advances  from   System   Corporations   for   Construction, 

Equipment,  and  Betterments. 

This  account  should  include  advances  from  controlling,  affili- 
ated,  controlled,  and  subsidiary  corporations  to  enable  the  ac- 
counting company  to  pay  for  construction,  equipment,  or  addi- 
tions and  betterments  if  such  advances  are  of  a  permanent  nature 
(i.  e.,  if  there  is  not  an  understanding  that  the  advances  are  to 
be  repaid  within  one  year),  or  if  it  is  understood  and  intended 
that  a  reimbursement  shall  be  made  by  the  issue  of  the  securi- 
ties of  the  debtor  corporation. 

Note  A.— Gifts  from  system  corporations  without  expectation  of  reim- 
bamment  should  not  be  credited  to  this  account  but  to  account  No.  iOl 
"Miwellaneous  Additions  to  Surplus,"  ' 

Note  B.— Temporary  advances  on  open  accounts  from  system  COTporations 
and  such  advances  for  purposes  other  than  construction,  equipment,  or 
additions  and  betterments  should  be  inchided  in  account  Xo.  100,  "Accounts 
Payable  to  System  Corporations." 

WORKING  LIABILITIES. 

156.  Judgments  Unpaid. 

When  any  judgment  of  indebtedness  is  rendered  against  the 
company  by  a  court  of  competent  jurisdiction,  or  any  fine  or 
penalty  requiring  the  payment  of  money  is  assessed  against  the 
company  by  such  a  court,  and  no  appeal  accompanied  by  stay 
of  execution  has  been  taken  therefrom  within  the  time  allowed 
by  law  for  such  appeal,  the  amount  of  such  judgment,'  fine,  or 
penalty  should  be  credited  to  this  account,  and  the  entry  should 
designate  the  action  or  suit  as  a  consequence  of  which  such  judg- 
nient  is  pronounced  or  such  fine  or  penalty  assessed .  The  designa- 
tion of  the  action  or  suit  should  show  what  court,  the  term  thereof, 
the  parties,  and  the  character  of  the  action  or  suit.  I  nterest  accru- 
ing upon  any  such  judgment  should  be  credited  ihonthly  to  this 
account.  When  payment  is  made  this  account  should  be 
charged. 

Note.— In  case  of  appeal  and  affirmance  in  whole  or  in  part,  from  which 
judgment  of  affirmance  a  further  appeal  lies,  the  same  rule  shall  apply  as  upon 
entry  of  (M-iginal  Judgment 


27 


i 


157.  Bills  Payable. 

This  account  should  include  the  par  value  of  all  notes,  drafts, 
and  other  evidences  of  indebtedness,  issued  or  assumed  by  the 
company,  and  which  are  payable  on  demand  or  within  a  time 
not  exceeding  one  year. 

Note.— When  loans  from  system  corporations  for  construction  purposes 
are  evidenced  by  demand  or  short-term  notes  intended  later  to  be  exchanged 
for  other  securities,  the  amount  of  such  loans  should  be  included  in  account 
No.  155,  "Advances  from  System  Corporations  for  Construction,  Equipment, 
and  Betterments." 

158.  AuDFTED  Vouchers  and  Wages  Unpaid. 

This  account  should  include  the  amount  of  audited  vouchers  or 
accounts  and  audited  pay  rolls  unpaid  on  the  date  of  the  balance 
sheet.  Include  also  the  amount  of  unclaimed  wages  and  out- 
standing pay  and  time  checks  issued  in  payment  of  wages. 

159.  Subscribers'  Deposfts. 

Credit  to  this  account,  as  such  deposits  are  made,  all  cash 
deposited  with  the  company  by  subscribers  for  telephone 
service  as  security  for  the  payment  of  bills.  Deposits  refunded 
should  be  charged  to  this  account  and  credited  to  cash .  Deposits 
applied  to  uncollectible  telephone  bills  should  be  credited 
to  the  account  of  the  subscriber  and  charged  to  this  account. 

160.  Accounts  Payable  to  System  Corporations. 

This  account  should  include  the  amounts  owed  to  controlling, 
afliliated,  controlled,  or  subsidiary  corporations  on  open  accounts 
other  than  those  provided  for  in  account  No.  155,  * 'Advances 
from  System  Corporations  for  Construction,  Equipment,  and 
Betterments." 

161.  Miscellaneous  Accounts  Payable. 

This  account  should  include  all  amounts  owed  to  miscellaneous 
creditors  on  open  accounts  and  not  provided  for  elsewhere. 

162.  Matured  Interest,  Dividends,  and  Rents  Unpaid. 

This  account  should  include  interest  matured  and  unpaid  on 
loans  and  funded  debt  of  the  accounting  company,  and  of  other 
companies,  when  payment  has  been  assumed  by  the  company; 
rents  due  and  unpaid  on  property  held  under  leases;  and  divi- 
dends due  and  payable  on  capital  stock  but  unpaid,  uncalled 
for,  or  unclaimed  at  the  date  of  the  balance  sheet. 

163.  Matured  Funded  Debt  Unpaid. 

This  account  should  include  the  amount  of  matured  mort- 
gage, bonded,  and  other  funded  debt  payable,  but  not  yet  paid, 
including  bonds  drawn  for  redemption  through  the  operation  of 
sinking  and  redemption  fund  agreements. 

164.  Service  Billed  in  Advance. 

When  bills  are  made  for  service  to  be  rendered  in  future 
months,  and  the  amount  of  the  bills  is  included  in  account  No. 
118,  "Due  from  Subscribers  and  Agents,"  or  other  asset  account 
but  not  in  the  revenue  accounts,  the  proportion  of  the  bills 


28 

applicable  to  future  months  should  be  credited  to  this  account. 
As  the  term  expires  for  which  the  bill  is  made,  the  appropriate 
revenue  account  should  be  credited  and  this  account  debited 
with  the  amount  applicable  to  the  current  month.  When  toll 
coupons  or  tickets  are  sold,  this  account  should  be  credited  with 
the  amount  representing  the  service  to  be  rendered.  At  the 
end  of  each  month  this  account  should  be  charged  and  the 
appropriate  revenue  accounts  credited  with  the  amount  of 
coupons  and  tickets  (less  the  discount,  in  case  coupons  or  tickets 
were  sold  at  a  discount)  redeemed  during  that  month. 

165.  Other  Current  Liabilities. 

This  account  should  include  the  amounts  of  all  current  liabili- 
ties which  are  not  included  in  any  of  the  foregoing  accounts. 
ACCRUED  LIABILITIES  NOT  DUE. 

166.  Taxes  Accrued. 

This  account  should  include  the  amount  of  taxes  accrued  and 
properly  charged  j^inst  income  or  other  accounts  in  excess  of 
the  amount  of  taxes  paid.     (See  sec.  16,  p.  47.) 

167.  Other  Accrued  Liabilities  not  Due. 

This  account  should  include  the  amount  of  interest  on  loans 
and  funded  debt,  including  interest  on  funded  debt  assumed, 
and  rents  under  leases  accrued  to  the  date  for  which  the  bal- 
ance sheet  is  made  but  not  due  until  after  that  date;  divi- 
dends on  stock  declared  prior  to  the  date  of  the  balance  sheet 
but  not  payable  until  after  that  date,  and  other  liabilities  (ex- 
cept taxes)  that  have  accrued  to  the  date  of  the  balance  sheet 
but  not  due  until  after  that  date. 

Note.— The  interest  aocnitag  on  any  judgment  against  the  company  or 
upon  any  receivers'  certificate  should  be  credited  to  the  account  to  which 
such  judgment  or  receivers'  certificate  stands  credited. 

DEFERRED  CREDIT  ITEMS. 

168.  Unextinguished  Premium  on  Debt. 

If  the  net  of  the  balances  in  the  discount-and-premium 
accounts  for  all  classes  of  funded  debt  sold  or  exchanged  is  a 
credit  balance,  the  amount  should  be  stated  in  this  account. 
(See  sec.  7,  p.  14.) 

169.  Insurance  and  Casualty  Reserves. 

This  account  should  include  any  specific  appropriation  of 
income  or  surplus  and  such  amounts  as  are  concurrently  charged 
to  account  No.  668,  ** Insurance,"  to  cover  self-carried  risks  on 
fire,  fidelity,  boiler,  casualty,  buiglar,  and  other  self-carried 
insurance.  Charge  to  this  account  the  proportion  of  losses 
realized  on  items  protected  by  such  self-carried  insurance. 

When  any  admitted  liability  arises  because  of  loss  or  damage 
to  the  property  of  others  or  of  injuries  to  employees  or  other  per- 
sons, the  amount  of  the  liability  may  (if  not  previously  provided 
for  by  insurance  or  self-insurance)  be  charged  to  the  appropriate 


V 


* 


^  29 

oi)eratiiig  expense  or  other  accounts  and  credited  to  this  account, 
against  which  (in  such  case)  the  actual  cost  of  satisfaction  of  the 
liability  should  be  charged  when  the  matter  is  determined.  If 
the  extent  of  the  liability  can  not  be  ascertained  promptly  after 
the  liability  arises,  it  may  be  estimated  as  accurately  as  prac- 
ticable for  the  purp>ose  of  determining  the  immediate  charge  to 
the  expense  or  other  appropriate  account,  in  which  case  the 
matter  should  be  adjusted  when  the  extent  of  the  liability  is 
definitely  ascertained.  If  the  loss  is  of  such  character  that  it  is 
in  whole  or  in  part  indemnifiable  under  any  contract  of  insurance 
carried  by  the  company,  the  indemnifiable  portion  of  the  loss 
should  be  chaiged  to  the  insurer  and  credited  to  this  account. 

170.  LiABiLmr  on  Account  op  Provident  Funds. 

This  account  should  include  any  8j)ecific  appropriations  of 
income  or  surplus  and  such  amounts  as  are  charged  to  account 
No.  672,  "Relief  Department  and  Pensions"  to  provide  for  pen- 
sion, benefit  and  other  provident  payments. 

This  account  should  also  include  the  ledger  balances  covering 
the  amount  of  cash  and  the  cost  or  book  value  of  securities  and 
other  assets  in  the  hands  of  trustees  or  managers  of  employees* 
pension  funds,  savings  funds,  relief,  hospital,  and  other  associa- 
tion funds  (whether  contributed  by  the  company,  by  employees, 
or  by  others),  when  such  trustees  or  managers  are  acting  for  the 
company  in  the  administration  of  such  funds;  also  the  amount 
of  such  funds  held  in  the  company's  treasury. 

APPROPRIATED  SURPLUS. 

171.  Surplus  Invested  Since  December  31,  1912,  in  Fixed  Capptal, 

This  account  should  Include  such  amounts  of  surplus  as  are  def- 
initely set  aside  to  cover  expenditures  for  extensions  or  improve- 
ments of  the  fixed  capital  of  the  accounting  company;  such  ap- 
propriations include  those  made  for  the  purpose  of  discharging  the 
principal  (less  the  discount,  if  any,  suffered  at  the  time  of  sale) 
of  any  obligations  incurred  in  the  acquisition  of  any  property 
whose  cost  is  carried  in  the  fixed  capital  accounts.  The  amounts 
credited  to  this  account  should  be  concurrently  charged  to 
account  No.  362,  "Appropriations  of  Income  for  Construction, 
Equipment,  and  Betterments,"  or  No.  415,  "Appropriations  of 
Surplus  for  Construction,  Equipment,  and  Betterments." 

This  account  should  not  include  temporary  appropriations  for 
the  acquisition  of  property  the  cost  of  which  is  intended  later  to 
be  met  by  an  issue  of  securities,  nor  appropriations  for  the  pay- 
ment of  obligations  which  are  intended  to  be  replaced  by  new 
issues. 

172.  Surplus  Invested  m  Sinking  Funds. 

This  accoimt  should  include  appropriations  of  income  or 
surplus  specifically  invested  or  set  aside  in  the  hands  of  trustees 
for  sinking  and  redemption  funds,  including  accretions  to  such 
funds. 


30 

The  amounts  credited  to  this  account  should  be  concurrently 
charged  to  account  No.  350,  "Appropriations  of  Income  to  Sink- 
ing and  Other  Reserve  Funds,"  or  No.  411,  "Appropriations  of 
Surplus  to  Sinking  and  Other  Reserve  Funds." 

173.  Other  Surplus  Reserved. 

This  account  should  include  all  appropriations  of  income  or  sur- 

.    plus  held  in  reserve  except  as  covered  by  accounts  Nos.  169,  170, 

171,  and  172.    A  separate  subaccount  c^ould  be  raised  for  each 

reserve,  and  the  entries  in  such  subaccounts  will  be  required 

to  be  shown  separately  in  the  annual  rep>ort  to  the  Commission. 

This  account  should  also  include  the  unexpended  balance,  if 
any,  of  appropriations  intended  to  be  invested  in  fixed  capital, 
and  such  appropriations  to  sinking  or  redemption  fund  reserves 
as  are  not  specifically  invested. 

CORPORATE  SURPLUS. 

174.  Corporate  Surplus  Unapproprlated. 

Under  this  head  should  be  shown  the  credit  balance,  if  any,  in 
the  Corporate  Surplus  or  Deficit  account.    (See  sec.  17,  p.  56.) 


fr 


^1 


i 


31 

FIXED  CAPITAL  ACCOUNTS. 

Page. 

100.  Fixed  Capital  Installed  Prior  to  January  1,  1913 36 

101.  Fixed  Capital  Installed  Since  December  31,  1912 36 

200.  Intangible  Capital 35 

201.  Organization 35 

202.  Franchises . . : 37 

203.  Patent  Rights 37 

204.  Other  Intangible  Capital 37 

207.  Right  of  Wat 37 

210.  Land  and  Buildings 33 

211.  Land .- , 33 

212.  Buildings 33 

220.  Central  Office  Equipment 39 

221.  Central  Office  Telephone  Equipment 39 

222.  Other  Equipment  of  Central  Offices 39 

230.  Station  Equipment 39 

231.  Station  Apparatus 39 

232.  Station  Installations 40 

233.  Interior  Block  Wires 40 

234.  Private  Branch  Exchanges 40 

235.  Booths  and  Special  Fittings 40 

241.  Exchange  Pole  Lines 40 

242.  Exchange  Aerla.l  Cable 40 

243.  Exchange  Aerial  Wire 40 

244.  Exchange  Underground  Conduits 40 

245.  Exchange  Underground  Cable 41 

246.  Exchange  Submarine  Cable 41 

251.  Toll  Pole  Lines 41 

252.  Toll  Aerial  Cable 41 

253.  Toll  Aerial  Wire 41 

254.  Toll  Underground  Conduit 41 

255.  Toll  Underground  Cable 42 

256.  Toll  Submarine  Cable 42 

260.  General  Equipment 42 

261.  Office  Furniture  and  Fixtures 42 

262.  General  Shop  Equipment 42 

263.  General  Store  Equipment 42 

264.  General  Stable  and  Garage  Equipm£nt. 43 

265.  General  Tools  and  Implements 43 

268.  Interest  During  Construction 43 

270.  Undistributed  Construction  Expenditures 43 

271.  Engineering  and  Superintendence 43 

272.  Law  Expenditures  During  Construction 43 

273.  Taxes  During  Construction 44 

274.  Miscellaneous  Construction  Expenditures 44 


»> 


If 


li 


32 

INSTRUCTIONS  PERTAINING  TO  FIXED  CAPITAL 

ACCOUNTS. 

9.  Fixed  capital  dcflned.— By  the  fixed  capital  of  a  company  (fre- 
quently termed  the  constructicm  account)  is  meant  the  property,  both 
tangible  and  intangible,  which  is  devoted  to  the  accomplishment  of 
the  principal  purposes  of  its  business,  and  which  has  an  expectation  of 
life  in  service  of  more  than  one  year  from  date  of  installation  in  service 
(exception  being  made  in  the  case  of  hand  tools  and  other  small  porta- 
ble  tools  that  may  be  lost  or  stolen). 

Fixed  capital  consists  of  original  capital,  additions,  bettermenU.  and 
replacements,  and  the  cost  thereof  should  be  charged  as  directed  below. 
Original  capital  is  the  fixed  capital  installed  or  acquired  prior  to  the 
beginning  of  regular  operaUons  by  the  company.  As  apphed  to  a  tele- 
phone company  it  includes  the  acquisition  or  construcUon  of  the  plant 
necessary  to  begin  the  regular  operation  of  an  exchange  or  toll  system. 
The  cost  of  original  capital  should  be  charged  to  the  appropriate  sub- 
accounte  under  account  No.  100,  "Fixed  Capital  Installed  Prior  to 
January  1,  1913,"  or  under  account  No.  101,  *'Fixed  Capital  Installed 
Since  December  31, 1912." 

Additi(ms  are  structures,  facilities,  equipment,  and  other  properUea 
added  to  those  in  service  at  the  beginning  of  operations,  and  not  taking 
the  place  of  any  property  of  like  purpose  previously  held  by  the  com- 
T>anv  The  cost  of  additions  should  be  charged  to  the  appropriate  sub- 
Jtccounte  under  account  No.  101.  "Fixed  Capital  InstaUed  Since  De- 
cember 31, 1912."  . 

Betterments  are  mechanical  changes  in  structures,  facilities,  or 
equipment  which  have  as  their  primary  aim  and  result  the  making  of 
the  properties  affected  more  useful  or  of  greater  capacity  than  they 
were  at  the  time  of  their  installation  or  acquisition.  The  cost  of  such 
portion  only  of  the  changes  incident  to  betterments  as  wiU,  when 
added  to  the  original  cost  of  the  property  bettered,  give  the  cost  of 
replacement  or  reconstruction  in  present  condition  of  tiie  property  aa 
bettered  should  be  charged  to  the  appropriate  subaccounts  under 
account  No  101,  "Fixed  Capital  Installed  Since  December  31,  1912. 
The  remainder  of  tiie  cost  of  the  change  should  be  classed  as  a  repair 
and  be  charged  to  the  appropriate  operating  expense  accounts^ 

Replacements  are  those  installations  of  fixed  capital  which  have  for 
their  purpose  tiie  substitution  of  one  buUding,  structure,  piece  of 
equipment,  or  machinery  for  anotiier  which  it  has  Wome  neces^ 
to  retire,  the  substitute  having  substantially  no  greater  capacity  than 
tiie  property  replaced;  also  tiie  extension  of  Ufe  period  of  franchisee, 
patents,  and  other  intangible  fixed  capital.  .     ^      . 

The  cost  of  the  fixed  capital  retired  should  be  credited  to  tiie  fixed 
capital  accounts  in  which  it  is  carried  and  tiie  cost  of  tiie  fixed  capital 
installed  in  place  of  fixed  capital  so  retired  should  be  cha^d  to  the 
appropriate  subaccounts  under  account  No.  101,  Fixed  Lapitai 
Installed  Since  December  31, 1912." 


^1 


bli 


33 


10.  Costs  to  be  actual  money  costs. — All  charges  made  to  fixed  capital 
or  other  property  accounts  with  respect  to  any  property  acquired  on  or 
after  January  1, 1913,  should  be  the  actual  money  costs  of  the  property. 
When  the  consideration  actually  given  for  anything  with  respect  to 
which  a  charge  is  mado  to  any  fixed  capital  or  other  property  account 
is  anything  other  than  money,  the  actual  consideration  should  be 
described  in  the  entry  with  sufficient  fullness  and  particularity  to 
identify  it,  and  the  amount  charged  should  be  the  actual  money  value 
of  such  consideration  at  the  time  of  the  transaction. 

11.  Interest  accruing  during  construction  period. — Account  No. 
268,  "Interest  During  Construction,"  should  include  only  such  pro- 
portion of  the  interest  on  funds  used  for  construction  purposes  and 
of  the  discount  and  expense  on  funded  debt  as  is  equitably  assign- 
able to  the  period  between  the  date  of  the  issuance  of  securities  and 
the  time  when  the  property  acquired  or  the  improvement  made  through 
such  issuance  becomes  available  for  the  service  for  which  it  is  intended. 
The  proportion  of  interest,  discount,  and  expense  thus  chargeable 
should  be  that  which  the  period  prior  to  the  completion  or  coming  into 
service  of  the  facilities  or  improvements  constructed  bears  to  the 
entire  life  of  the  securities  issued. 

12.  Costs  of  labor,  materials,  and  supplies. — The  term  cost  as  used 
in  the  fixed  capital  (or  construction)  accounts  means  the  actual  cost  in 
money  of  labor  and  materials  used  in  construction,  or  the  actual  cost  in 
money  of  property  acquired  after  construction,  or  if  the  consideration 
given  is  other  than  money,  the  actual  money  value  of  such  other  con- 
sideration at  the  time  of  the  purchase.  Cost  of  labor  includes  not  only 
wages,  salaries,  and  fees  paid  employees,  but  also  the  personal  expenses 
of  such  employees  when  borne  by  the  company.  Cost  of  material  and 
supplies  consumed  in  construction  is  the  cost  at  the  places  where  they 
enter  into  construction,  including  cost  of  transportation  and  inspec- 
tion when  specifically  assignable.  If  such  materials  and  supplies  are 
passed  through  storehouses,  their  cost  entered  in  the  account  may  in- 
clude a  suitable  proportion  of  store  expense. 

13.  Plant  and  equipment  and  other  property  purchased. — When 
any  property  in  the  form  of  a  going  or  completed  plant  is  purchased,  an 
appraisal  of  the  property  so  acquired  should  be  made,  and  the  different 
constituent  elements  of  the  plant  (and  equipment,  if  any)  or  other 
property  acquired  should  be  appraised  at  their  structural  value;  that 
is  to  say,  at  the  estimated  cost  of  replacement  or  reproduction  less 
deterioration  to  the  then  existing  conditions  through  wear  and  tear, 
obsolescence,  and  inadequacy.  If  the  actual  money  value  of  the  con- 
sideration given  for  the  plant  or  other  property  was  at  the  time  of  the 
acquisition  in  excess  of  such  appraised  value,  the  excess  should  be 
charged  to  account  No.  204,  "Other  Intangible  Capital,"  and  the 
appraised  values  of  the  constituent  elements  should  be  chained  to  the 
appropriate  fixed  capital  accounts  aa  hereinafter  designated.  If  the 
actual  money  value  of  the  consideration  given  was  not  in  excess  of 

72528'— 15 5 


III 


34 


such  appraised  value,  such  actual  money  value  should  be  distributed 
through  the  said  accounts  in  proportion  to  the  said  appraised  value  of 
the  constituent  elements  appropriate  to  the  resjjective  accounts. 

Companies  should  be  prepared  to  furnish  the  Commission,  upon  de- 
mand, a  full  report  of  the  contract  of  acquisition,  the  consideration 
given  therefor,  the  determination  of  the  actual  money  value  of  such 
consideration  if  other  than  money,  the  appraisal,  and  the  amounts 
charged  to  the  respective  accounts  for  each  plant  or  other  such  fixed 
capital  purchased.  The  purchaser  is  required  to  procure  in  connection 
with  the  acquisition  of  any  such  plant  or  other  fixed  capital  all  exist- 
ing records,  memoranda,  and  accounts  in  the  possession  or  control  of 
the  grantor  relating  to  the  construction  and  improvement  of  such 
plant,  and  to  preserve  such  records,  memoranda,  and  accounts  until 
authorized  by  law  to  destroy  or  otherwise  dispose  of  them. 

14.  Fixed  capital  withdrawn  or  retired. — (a)  When  any  tangible 
fixed  capital  acquired  prior  to  January  1,  1913,  is  withdrawn  or 
retired  from  service  for  any  cause,  the  amount  at  which  it  stands 
charged  should  be  credited  to  the  subaccount  under  account  No.  100, 
*' Fixed  Capital  Installed  Prior  to  January  1,  1913,"  in  which  it  is 
charged,  and  such  amount,  plus  the  expenses  incident  to  the  retire- 
ment, less  the  value  of  salvage,  should  be  charged  (1)  to  account 
No.  102,  "Reserve  for  Accrued  Depreciation — Cr."  for  the  proportion 
applicable  to  the  period  covered  by  the  reserve,  and  (2)  to  account 
No.  413,  **  Realized  Depreciation  not  Covered  by  Reserves"  for  the 
remainder.  Such  portion  only  of  the  realized  depreciation  shall  be 
charged  to  account  No.  102,  as  is  due  to  life  in  service  during  the  period 
for  which  the  reserve  was  established;  this  portion  may  be  estimated 
on  the  basis  of  the  proportion  which  the  life  in  service  of  the  property 
in  question  after  that  date  bears  to  its  entire  life  in  service. 

The  entry  of  the  credit  to  the  fixed  capital  account  should  cite  by 
name  and  page  of  book  or  other  record  the  original  entry  of  cost  of  the 
thing  withdrawn.  If  there  is  no  such  original  entry,  that  fact  should 
be  stated  in  connection  with  the  credit  entry,  and  the  actual  amount 
originally  charged  should  be  credited.  If  such  amount  is  not  known,  it 
should  be  estimated,  the  facts  upon  which  the  estimate  is  based  and  the 
name  of  the  person  by  whom  estimated  should  be  shown,  and  the 
amount  thus  estimated  to  be  equivalent  to  the  original  charge  in 
respect  of  such  thing  withdrawn  should  be  credited  to  the  fixed  capital 
accounts  involved. 

(6)  WTien  any  tangible  fixed  capital  acquired  subsequent  to  Decem- 
ber 31,  1912,  is  withdrawn  or  retired  from  service  for  any  cause  the 
amount  at  which  it  stands  charged  should  be  credited  to  the  fixed 
capital  account  in  which  it  is  charged,  and  such  amount,  plus  the 
expenses  incident  to  the  retirement,  less  the  value  of  salvage,  should 
be  charged  to  ?iccount  No.  102,  ''Reserve  for  Accrued  Deprecia- 
tion—Cr." 


i 


35 

The  entry  of  the  credit  to  the  fixed  capital  account  should  cite  by 
imme  and  page  of  book  or  other  record  the  original  entry  of  cost  of  the 
thing  withdrawn. 

(c)  If    the  age  of  tangible  fixed  capital  withdrawn  or  retired  from 

J^^^irT^'/n^  ^^  determined  for  classification  between  account  No. 

T'  .^^ui^^^^  ^'''^"^  ^"^^  ^  •^^'^^'^  1'  1913,"  and  account 
No.  101,  Fixed  Capital  Installed  Since  December  31  1912  "  the 
property  so  retired  should  be  treated  as  having  been  charged  'to  the 
former  account,  and  the  necessary  credits  should  be  made  to  the 
subaccounts  thereunder. 

(d)  When  any  fixed  capital  is  withdrawn  or  retired  whose  book  value 
as  earned  in  the  fixed  capital  accounts  has  been  reduced  by  writing 
off  estimated  depreciation,  only  that  part  of  the  realized  depreciati^ 

M^  ino^.r^  f^  ^^"^  "^"^^  ^^  *^^^  b«  ^^^^  to  account 

fiQ  ^Z'  .  "^T  '  ^'''^'"'^  Depreciation-Cr.,"  or  to  account  No. 
4ld,     Realized  Depreciation  not  Covered  by  Reserves  " 

(6)  When  any  fixed  capital  is  withdrawn  or  retired  whose  book  value 
18  greater  than  the  known  or  estimated  cost,  such  excess  should  be 
charged  to  account  No.  417,  "Other  Deductions  from  Surplus,"  and  the 
realized  depreciation  should  be  chai^d  as  elsewhere  directed 

(/)  If  any  fixed  capital  is  sold  for  more  than  its  original  cost  the 
amount  of  depreciation,  if  any,  accrued  and  credited  to  a  reserve  in 
respect  thereof,  should  be  determined  as  accurately  as  possible  and 
charged  to  such  reserve.  The  sum  of  the  amount  so  charged  and  the 
excess  of  the  selling  price  over  the  cost  of  the  property  should  be 
credited  to  account  No.  401,  "Miscellaneous  Additions  to  Surplus  " 


36 

TEXT  EXPLANATORY  OF  FIXED  CAPITAL  ACCOUNTS. 

100.  Fixed  Capital  Installed  Prior  to  January  1,  1913. 

This  account  is  a  summary  of  those  accounts  which  include 
the  fixed  capital  of  the  company  installed  prior  to  January  1, 
1913,  and  which  is  still  in  service  at  the  date  of  the  balance  sheet. 

The  accounts  representing  the  fixed  capital  of  the  company 
as  carried  on  its  books  at  the  close  of  December  31, 1912,  should  be 
so  designated  upon  the  books  of  the  company  as  to  show  clearly 
that  they  relate  only  to  fixed  capital  installed  prior  to  the  close 
of  that  date.  No  debits  should  be  made  to  such  accounts  with 
respect  to  any  property  subsequently  acquired,  but  the  cost  of 
such  property  should  be  charged  to  the  accounts  hereinafter 
provided.    (See  sec.  9,  p.  32,  and  note  under  account  No.  101.) 

Not*.— In  the  reports  to  the  Commfasion  a  statement  will  be  required  show- 
ing the  names  of  the  accounts  for  flxed  capital  actually  carried  by  the  company 
on  December  31, 1912,  and  the  balances  therein  at  the  date  of  the  report. 

101.  Fixed  Capital  Installed  Since  December  31,  1912. 

This  account  is  a  summary  of  accounts  Noe.  200  to  274,  inclu- 
sive, which  include  the  cost  of  fixed  capital  installed  since 
December  31,  1912.  The  sum  of  the  balances  in  accounts  Noe. 
200  to  274,  inclusive,  as  provided  hereinafter,  should  be  shown 
on  the  balance-sheet  statement  under  this  account.  (See  sec.  9, 
p.  32.) 

Note.— If  the  accounts  of  a  telephone  company  have  been  kept  as  pre- 
scribed by  a  State  commission  and  it  is  possible  to  cloae  the  fUed  capItAl 
accounts  substantially  into  the  primary  flxed  capital  accounts  prescribed 
hereinafter,  it  will  not  be  necessary  to  separate  the  flxed  capital  accounts  as 
of  January  1,  1913,  but  the  primary  accounts  under  account  Na  101  may 
include  the  flxed  capital  accounts  since  the  efTective  date  of  supervision  by 
the  State  commission,  and  the  dates  in  the  titles  of  accounts  Nos.  100  and  101 
may  be  changed  accordingly. 

200.  Intangible  Capital. 

This  account  should  include  the  cost  of  intangible  capital,  as 
provided  for  in  the  following  subaccounts: 
201.  Organization. 

This  account  should  include  all  fees  paid  to  governments  for 
the  privilege  of  incorporation,  and  all  office  and  other  expendi- 
tures incident  to  organizing  the  company  or  other  enteiprise  and 
putting  it  in  readiness  to  do  business.  This  includes  the  cost 
of  preparing  and  distributing  prospectuses,  the  cost  of  soliciting 
subscriptions  for  stock  (but  not  for  loans  nor  for  the  purchase  of 
bonds  or  other  evidence  of  indebtedness),  cash  fees  paid  to  pro- 
moters, and  the  actual  cash  value  at  the  time  of  organization  of 
securities  paid  to  promoters  for  their  services  in  organizing  the 
enterprise;  counsel  fees;  cost  of  preparing  and  issuing  certifi- 
cates  of  stock,  and  cost  of  procuring  certificates  of  necessity  from 
State  authorities,  and  other  like  costs. 


^1 


i 


> 


37 

202.  Franchises. 

This  account  should  include  the  amount  (exclusive  of  any  tax 
or  annual  charge)  actually  paid  to  governments  as  the  considera- 
tion for  the  grant  of  such  franchise  or  right  as  is  necessary  to  the 
conduct  of  the  company's  telephone  operations.  If  any  such 
franchise  is  acquired  by  assignment,  the  charge  to  this  ac- 
count in  respect  thereof  should  not  exceed  the  amount  actually 
paid  therefor  by  the  company  to  its  assignor,  nor  should  it 
exceed  the  amount  actually  paid  the  government.  Any  excess 
of  the  amount  actually  paid  by  the  company  over  the  amount 
paid  by  the  original  grantee  to  the  grantor  of  the  franchise  should 
be  charged  to  account  No.  204,  ''Other  Intangible  Capital." 
If  any  such  franchise  has  a  life  of  not  more  than  one  year  after 
the  date  when  it  is  first  exercised  by  the  company,  it  should 
not  be  charged  to  this  account,  but  to  the  appropriate  accounts 
in  operating  expenses,  or  in  account  No.  128,  "  Prepayments,  "- 
if  extending  beyond  the  fiscal  year. 

Note.— Annual  or  more  frequent  payments  in  respect  of  franchises  must 
not  be  charged  to  this  account,  but  to  the  appropriate  tax  or  operating  expense 
account. 

203.  Patent  Rights. 

This  account  should  include  the  cost  of  all  rights  (having  a 
life  of  more  than  one  year  from  the  date  when  placed  in  service) 
acquired  by  the  company  in  or  under  valid  patents  granted  by 
the  United  States  to  inventors  for  inventions  and  discoveries 
in  connection  with  the  conduct  of  the  company's  telephone 
operations. 

204.  Other  Intangible  Capital. 

This  account  should  include  the  cost  of  all  other  property  com- 
ing within  the  definition  of  intangible  capital  and  devoted  to 
telephone  operations.  Entries  of  chaises  to  this  account  should 
describe  the  acquired  property  with  sufficient  particularity 
cleariy  to  identify  it,  and  should  also  show  specifically  the  prin- 
cipal from  whom  acquired  and  all  agents  representing  such 
principal  in  the  transaction;  also  the  term  of  life  of  such  prop- 
erty, estimated  if  not  known,  and,  if  estimated,  the  facts  upon 
which  the  estimate  is  based.  (See  sec.  13,  p.  33.) 
207.  Right  of  Way. 

This  account  should  include  the  cost  of  all  land  and  interests 
in  land  acquired  for  the  location  of  telephone  wires,  cables,  pole 
lines,  and  conduits;  salaries  and  expenses  of  right-of-way  agents; 
expenses  of  appraisals  and  of  juries,  conunissioners,  or  arbitra- 
tors in  condemnation  cases;  real-estate  brokers'  commissions; 
cost  of  plats,  abstracts,  notarial  fees,  examination  of  title,  re^ 
cording  deeds,  etc. 

This  account  should  also  include  the  first  cost  of  acquiring 
leaseholds  of  land  for  right  of  way,  the  terms  of  which  are  rnor© 


<j 


38 


than  one  year  each,  whether  acquired  through  direct  lease, 
assignment,  or  otherwise  (but  not  including  the  rents  paid 
periodically  in  consideration  of  rights  obtained  under  such 
leases).  If  any  such  leasehold  is  acquired  by  assignment,  the 
charge  to  this  account  must  not  exceed  the  amount  actually 
paid  therefor  by  the  accounting  company  to  the  assignor. 
210.  Land  and  BmLDiNos. 

This  account  should  include  the  cost  of  land  and  buildings 
as  provided  for  in  the  following  subaccounts: 
211.  Land. 

This  account  should  include  the  cost  of  all  land  and  interests 
in  land,  other  than  right  of  way,  acquired  for  use  in  the  opera- 
tion of  the  telephone  plant,  such  as  land  occupied  by  general 
and  central  offices,  shops,  stables,  garages,  storehouses,  etc.  It 
includes  the  cost  of  examination  and  registration  of  title,  con- 
veyancer's and  notary's  fees,  purchasing  agent's  commissions  or 
proportion  of  purchasing  agent's  salary,  taxes  accrued  to  date  of 
transfer  of  title,  and  all  liens  upon  the  title,  when  such  costs 
are  assumed  or  paid  by  the  purchaser  in  his  own  behalf;  cost 
of  assessments  for  public  improvements  which  add  to  the  value 
of  the  lands  but  which  are  not  the  property  of  the  accounting 
company;  cost  of  grading  land  when  not  done  in  connection 
with  buildings;  and  costs  of  obtaining  consents  and  payments 
for  abutting  damages  and  expenses  of  condemnation  proceedings. 

This  account  should  also  include  the  first  cost  of  acquiring 
leaseholds  of  land,  other  than  for  right  of  way,  the  terms  of 
which  are  more  than  one  year  each,  whether  acquired  through 
direct  lease,  assignment,  or  otherwise  (but  not  including  the 
rents  paid  periodically  in  consideration  of  rights  obtained  under 
such  leases).  If  any  such  leasehold  is  acquired  by  assignment, 
the  charge  to  this  account  must  not  exceed  the  amount  actually 
paid  therefor  by  the  accounting  company  to  the  assignor. 

Note.— Cost  of  buildings  and  other  improvements  (except  as  specified 
above)  should  not  be  included  in  this  subaccount.  If  at  the  time  of  acquisi- 
tion of  an  interest  in  land  such  interest  extends  to  buildings  or  other  im- 
provements thereon,  which  improvements  are  devoted  by  the  company  to 
telephone  operations,  and  if  the  price  of  such  improvements  is  not  deter- 
mined by  the  contract,  the  buildings  or  improvements  should  be  appraised 
at  their  fair  cash  value  for  use  in  such  operations,  and  such  appraised  value 
shall  be  charged  to  account  No.  212,  "Buildings."  If  such  improvements 
are  devoted  to  operations  other  than  telephone  or  held  an  investments,  the 
cost  (or  the  appraised  value,  if  the  cost  is  not  determined  In  the  contract 
of  acquisition)  should  be  charged  to  accovmt  No.  HI,  "Miscellaneous 
Investments."  If  the  improvements  are  removed  or  wrecked,  the  salvage 
(less  the  cost  of  removal  or  wreckage)  should  be  credited  to  this  account. 

212.  Buildings. 

This  account  should  include  the  cost  of  all  buildings,  such  as 
general  and  central  offices,  shops,  stables,  garages,  storehouses, 
etc.,  devoted  to  the  general  purposes  of  the  company;  also  of  all 


<•.! 


f   i 


39 

permanent  fixtures,  such  as  water,  steam,  and  gas  pipes  and  fix- 
tures; electric  wiring  and  fixtures  for  lighting,  signaling,  etc.; 
elevators  and  the  engines  and  motors  specially  provided  for  oper- 
ating them;  furnaces,  boilers,  and  other  apparatus  provided  for 
producing  steam  for  such  engines  and  for  heating ;  electric  genera- 
tors specially  provided  for  producing  current  for  lighting  such 
buildings,  etc.  This  account  includes  such  piers  and  other  foun- 
dations for  machinery  and  apparatus  as  are  designed  to  be  as  per- 
manent as  the  buildings  in  (or  in  connection  with)  which  they 
are  constructed,  and  to  outlast  the  first  machinery  or  apparatus 
mounted  thereon .  It  also  includes  the  cost  of  real-estate  brokers' 
commissions,  examinations  and  registrations  of  titles,  and  other 
expenses,  such  as  architects'  fees,  supervision,  etc.,  incident  to 
the  construction  or  purchase  of  buildings;  and  the  cost  of  grad- 
ing and  of  sidewalks,  fences,  hedges,  etc.,  on  grounds  used  in 
connection  with  such  buildings.  It  does  not  include  any  tele- 
phone equipment,  wiring,  or  apparatus  for  generating  or  con- 
trolling electricity  for  operation  of  the  telephone  system. 
220.  Central  Office  Equipment. 

This  account  should  include  the  cost  of  all  central  office 
equipment,  as  follows: 

221.  Central  Office  Telephone  Equipment. 

This  account  should  include  the  cost  of  local  and  toll  switch- 
boards, chief  operators',  monitors',  and  supervisors'  desks  and 
tables,  wire  chiefs'  testing  outfits,  main  and  intermediate  frames, 
cables,  and  jumper  wires,  call  registers  or  meters,  relay  racks 
and  coil  racks,  and  power  plants,  including  rectifiers,  generators, 
engines,  motors,  batteries,  power  switchboards,  meters,  and 
fuse  boards;  telephone  and  telegraph  instruments,  and  other 
electrical  instruments  and  apparatus  in  the  central  office  de- 
voted to  the  operation  of  the  telephone  plant. 

222.  Other  Equipment  of  Central  Offices. 

This  account  should  include  the  cost  of  furniture  and  equip- 
ment (other  than  telephone  equipment)  in  central  offices  for  the 
operating  forces.  This  account  includes  the  furniture  and 
equipment  in  operators'  rest  and  lunch  rooms,  and  in  operators* 
schools. 
230.  Station  Equipment. 

This  account  should  include  the  cost  of  all  telephone  terminal 
equipment  installed  in  service,  either  for  subscribers  or  for 
company  use,  including  the  cost  of  installation,  as  follows: 
231.  Station  Apparatus. 

This  account  should  include  the  cost  of  station  apparatus,  such 
as  telephone  sets,  intercommunicating  sets,  bells,  backboards, 
desk  stands,  coin  boxes,  protectors,  battery  boxes,  initial  batteries 
and  cords,  special  station  switching  devices  not  otherwise  classi- 
fied, and  telephone  and  telegraph  instruments  or  parts  thereof 
when  owned  by  the  company  and  installed  for  service. 


233. 


234. 


40 

232.  Station  Installations. 

This  account  should  include  the  coat  of  infltalling  station  appa- 
ratus and  the  cost  of  inside  wires;  that  is,  the  wires  (or  cables)  from 
the  instruments  to  the  point  of  entrance  to  the  building,  where 
the  drop  wires  or  interior  block  wires  terminate,  or  to  the  junc- 
tion boxes,  where  the  house  cable  or  other  cable  terminates, 
including  wires  on  the  same  premises  to  connect  main  and  ex- 
tension stations,  or  to  connect  the  private  branch  exchange 
distributing  frames  with  their  terminal  stations. 
Interior  Block  Wires. 

This  account  should  include  the  cost  of  interior  block  wires  (or 
cables)  from  the  point  of  entrance  to  the  building,  where  con- 
nection is  made  with  the  inside  wires,  to  the  point  of  connec- 
tion with  the  permanent  circuits  at  the  terminals  (block  cable 
boxes)  of  the  subsidiary  underground  cable  or  subsidiary  aerial 
cable. 
Private  Branch  Exchanges. 

This  account  should  include  the  cost  of  private  branch  ex- 
change  switchboards,    their   distributing   frames,    the   cables 
connecting  such  switchboards  and  distributing  frames,  and  the 
cost  of  installation. 
235.  Booths  and  Special  Fittings. 

This  account  should  include  the  cost  of  booths  and  special 
fittings,  such  as  desks,   chairs,  fans,  and  c<ish  registers,  and 
the  cost  of  installation. 
Exchange  Pole  Lines. ^ 

This  account  should  include  the  cost  of  poles,  towers,  ctobb 
arms,  pins,  brackets,  braces,  guy  wire,  guy  stubs,  and  other 
materials  used  in  the  construction  of  exchange  service  pole  lines; 
also  the  cost  of  first  clearing  right  of  way. 
Exchange  Aerial  Cable. ^ 

This  account  should  include  the  cost  of  cables  devoted  to  ex- 
change service  including  the  cost  of  suspension  wire,  cable  clipa 
and  rings,  cable  boxes  and  fittings,  pole  seats  and  platforms, 
loading  coils,  pot  heads,  protectors,  sleeves,  and  other  material 
used  in  hanging  such  cables. 
Exchange  Aerlal  Wire.' 

This  account  should  include  the  cost  of  exchange  service 
wires,  including  insulators,  sleeves,  and  other  materials  used  in 
attaching  such  wires  to  the  insulators.  The  exchange  wire  in- 
cludes the  dr6p  wire  leading  from  the  overhead  plant  to  the 
point  of  entrance  to  the  building. 
244.  Exchange  Underground  Conduits.* 

This  account  should  include  the  coat  of  exchange  service 
conduits,  including  the  cost  of  pipe,  cement,  manholes,  man- 


241. 


242. 


243. 


1  If  plant  is  used  both  for  exchange  and  toll  service,  the  principal  a<«e  of  such  plank 
should  determine  its  classification. 


%^ 


i 


k 


41 

hole  furnishings,  and  other  materials  used,  the  cost  of  connec- 
tions to  poles  and  buildings,  repaving,  and  other  costs  incident 
to  the  installation  of  such  conduits. 
245.  Exchange  [Jnderqround  Cable.  * 

This  account  should  include  the  cost  of  exchange  service 
underground  cables,  including  cable  boxes  and  fittings,  loading 
coils,  and  other  materials  used  in  the  work  of  instalhng  such 
cables,  and  other  cost  incident  thereto. 

This  account  should  include,  in  addition  to  the  main  exchange 
underground  cable,  the  subsidiary  cables  through  laterals  to  pole 
or  building  terminals;  the  subsidiary  cables  to  the  interior  of 
City  blocks  for  connection  with  interior  block  wires;  and  the 
subsidiary  cables  entering  vertically  (as  house  cables)  into  build- 
mgs  for  connection  there  with  inside  wires. 

NoTE.-House  cables  are  coasidered  to  be  vertical  extensions  of  under- 
ground cables  or  plant  similar  thereto.  They  do  not  include  the  inside  wires 
extending  from  terminal  boxes  of  house  cables  to  subscribers'  stations,  nor 
the  cables  for  subscribers'  private  branch  exchange  switchboards  which  are 
mcluded  in  account  No.  232,  "Station  Installations." 

246.  Exchange  Submarine  Cable.* 

This  account  should  include  the  cost  of  exchange  submarine 
cable,  cable  towers,  loading  coils,  cable  boxes  and  fittings,  and 
other  materials  used  in  the  installation  of  such  cables,  and  other 
costs  incident  thereto. 

251.  Toll  Pole  Lines.' 

This  account  should  include  the  cost  of  poles,  towers,  cross 
arms,  pins,  brackets,  braces,  guy  wire,  guy  stubs,  and'  other 
materials  used  in  the  construction  of  toll-service  pole  Unes;  also 
the  cost  of  first  clearing  right  of  way. 

252.  Toll  Aerlal  Cable.' 

This  account  should  include  the  cost  of  cables  devoted  to  toU 
service,  including  the  cost  of  suspension  wire,  cable  cUps  and 
rings,  cable  boxes  and  fittings,  pole  seata  and  platforms,  loading 
coils,  pot  heads,  protectors,  sleeves,  and  other  materials  used  in 
hanging  such  cables. 

253.  Toll  Aerial  Wire.' 

This  account  should  include  the  cost  of  toll-service  wires, 
including  insulators,  sleeves,  and  other  materials  used  in  at^ 
taching  such  wires  to  the  insulators. 

254.  Toll  Underground  Conduit.' 

This  account  should  include  the  cost  of  toll-service  conduita, 
including  the  cost  of  pipe,  cement,  manholes,  manhole  furnish- 
ings, and  other  materials  used,  the  cost  of  connections  to  poles 
and  buildings,  repaving,  and  other  costs  incident  to  the  instaUa- 
tion  of  such  conduits. 


\ 


I  If  plant  is  ased  both  for  exchange  and  toU  service,  the  principal  use  of  such  plant 
should  determine  its  classification. 


42 

255.  Toll  Underground  Cable. ^ 

This  account  should  include  the  cost  of  tollnBervice  under- 
ground cables,  including  cable  boxes  and  fittings,  loading  coils, 
and  other  materials  used  in  the  work  of  installing  such  cables, 
and  other  costs  incident  thereto. 

256.  Toll  Submarine  Cable.* 

This  account  should  include  the  cost  of  toll  submarine  cable, 
cable  towers,  loading  coils,  cable  boxes  and  fittings,  and  other 
materials  used  in  the  installation  of  such  cables,  and  other  coets 
incident  thereto. 
260.  General  Equipment.   • 

This  account  should  include  the  cost  of  the  equipment  classi- 
fied in  the  subaccounts  hereunder.  Items  of  small  value  or  short 
life,  such  as  portaole  tools  liable  to  be  lost  or  stolen,  temporary 
shelving,  waste  baskets,  gloves,  whips,  and  the  like,  should  not 
be  included  in  this  account  or  the  subaccounts  hereunder  but 
should  be  charged  direct  to  the  operating  expense  accounts  or* 
to  the  clearing  accounts. 

261.  Office  Furniture  and  Fixtures. 

This  account  should  include  the  cost  of  desks,  tables,  chairs, 
carpets,  cases,  movable  partitions,  railings,  shelves,  typewriters, 
addressing  machines,  adding  machines,  and  other  oflice  devices; 
stoves,  portable  gas  and  electric  fixtures,  and  other  oflSce  fittings 
^  (except  fittings  considered  a  part  of  the  building  as  provided  for 

in  account  No.  212,  "  Buildings,  "  and  telephone  equipment  pro- 
vided for  under  account  No.  220.  "Central  Office  Equipment. ") 

262.  General  Shop  Equipment. 

This  account  should  include  the  cost  of  all  equipment  spe- 
cially provided  for  general  shops,  such  as  engines,  gas  pro- 
ducers, electric  generators,  and  other  power  apparatus  used  in 
operating  machinery  in  such  shops;  machine  tools,  shafting, 
belts,  and  like  shop  equipment;  also  such  smithing  equip- 
ment in  general  shops  as  is  used  principally  for  general  pur- 
poses other  than  shoeing  horses  and  repairing  vehicles. 

Note.— Hand  and  other  small  portable  tools  liable  to  be  lost  or  stolen 
should  not  be  included  herein,  but  portable  tools  and  apparatus  of  special 
value  may  be  charged  to  this  account  and  remain  herein  so  long  as  record 
is  kept  of  stich  tools  and  apparatus. 

263.  Genial  Store  Equipment. 

This  account  should  include  the  cost  of  all  equipment  of  general 
.  store  structures,  such  as  movable  counters,  movable  shelving,  and 

other  movable  equipment  of  like  nature;  carts,  barrows,  trucks, 
tools,  etc.,  and  other  apparatus  and  appliances  used  in  han- 
dling, storing,  or  packing  materials  and  supplies. 

NoTK.— Counters,  shelving,  and  the  like  which  are  permanently  attached 
to  the  structure  should  be  charged  to  account  No.  212,  "BulWings,"  and 
not  to  this  account. 


^#1  ^* 


i^ 


{ 


.  r.^ 


»  Tf  plant  Is  ased  both  for  exchange  and  toll  senrke,  the  principal  use  of  such  plant 
should  determine  its  classification. 


43 

264.  General  Stable  and  Garage  Equipment. 

This  account  should  include  the  cost  of  all  equipment  of  gen- 
eral stables,  including  horses,  harness,  drays,  wagons,  automobiles 
and  other  vehicles;  equipment  of  shoeing  shops,  harness-repair 
shops,  vehicle-repair  shops,  etc. 

265.  Otneral  Tools  and  Implements. 

This  account  should  include  the  cost  of  portable  testing  ap- 
paratus and  valuable  tools  and  implements  devoted  to  the  main- 
tenance or  construction  of  the  telephone  plant  and  not  provided 
for  in  the  equipment  accounts.  This  does  not  include  tools  not 
yet  in  use  carried  as  supplies  unissued. 
268.  Interest  During  Construction. 

This  account  should  include  the  interest  upon  all  moneys  (and 
credits  available  upon  demand)  devoted  to  the  construction  and 
equipment  of  the  property  from  the  time  of  such  devotion  until 
the  construction  is  ready  for  use.  Interest  receivable  accrued 
upon  such  moneys  (and  upon  such  credita)  should  be  credited 
to  this  account. 

If  any  property  with  respect  to  which  an  interest  charge  is 
included  in  this  account  is  withdrawn  or  retired  from  service, 
the  amount  of  such  interest  (estimated,  if  not  known)  should  be 
credited  to  this  account  and  charged  off  aa  a  part  of  the  original 
cost  of  the  property  so  retired.  No  interest  upon  expenditures 
for  replacements  or  reconstruction  should  be  included  in 
this  account  or  any  other  fixed  capital  account  unless  proper 
credits  are  made  to  the  appropriate  fixed  capital  accounts  for 
any  interest  included  in  such  accounts  in  respect  of  the  property 
retired  or  withdrawn.  (See  sec.  11,  p.  33.) 
270.  Undistributed  Construction  Expenditures. 

This  account  should  include  the  expenditures  provided  for  in 
the  following  subaccounts  when  such  expenditures  can  not  be 
satisfactorily  allocated  to  the  fixed  capital  accounts  to  which  they 
relate.  Upon  the  retirement  or  withdrawal  of  any  property  with 
respect  to  which  any  charge  is  included  in  this  account  or  any 
subaccount  hereunder,  there  should  be  credited  to  this  account 
or  the  appropriate  subaccount  such  part  of  the  undistributed  ex- 
penditures during  construction  (estimated,  if  not  known)  as  may 
be  applicable  to  the  property  withdrawn  or  retired. 

271.  Engineering  and  Superintendence. 

This  account  should  include  all  expenditures  for  services  and 
expenses  of  engineers,  draftsmen,  and  superintendents  employed 
on  preliminary  and  construction  work  when  the  expenditures  can 
not  be  assigned  to  specific  construction  accounts. 

272.  Law  Expenditures  During  Construction. 

This  account  should  include  general  law  expenditures  incurred 
in  the  construction  of  the  telephone  plant,  such  as  the  pay  and 
expenses  of  counsel,  solicitors,  and  attorneys,  their  clerks  and 
attendants,  and  expensesof  theiroffices;  the  cost  of  printing  briefs, 


44 

legal  fonns,  testimony,  reports,  etc. ;  payments  to  arbitrators  for 
the  settlement  of  disputed  questions;  cost  of  suits  and  payments 
of  special  fees,  notarial  fees,  and  witness  fees,  and  other  court  ex- 
penses. When  any  of  the  expenditures  enumerated  herein  can 
be  charged  directly  to  the  account  for  which  incurred,  they 
should  be  so  charged  and  not  to  this  account.  Expenditures 
incurred  in  connection  with  the  acquisition  of  right  of  way 
should  be  charged  to  account  No.  207,  "Right  of  Way,"  and  in 
the  acquisition  of  other  land  to  account  No.  211,  "Land." 
Law  expenditures  in  connection  with  the  organization  of  the  cor- 
poration should  be  charged  to  account  No.  201,  "Organization." 

273.  Taxes  During  Construction.  * 

This  account  should  include  all  taxes  and  assessments  levied 
and  paid  on  property  belonging  to  the  company  while  under  con- 
struction and  before  the  plant  is  opened  for  operation,  except 
special  taxes  assessed  for  street  and  other  improvements,  such 
as  grading,  sewering,  curbing,  guttering,  paving,  sidewalks,  etc., 
which  should  be  charged  to  the  account  to  which  the  property 
benefited  is  charged. 

274.  Miscellaneous  Construction  Expenditures. 

This  account  should  include  salaries  and  expenses  of  executive 
and  general  oflBcers  of  the  telephone  company  before  it  is  ready 
to  begin  operations;  clerks  in  general  offices  engaged  on  construc- 
tion accounts  or  work;  rent  and  repair  of  general  offices  when 
rented,  with  the  office  expenses;  insurance  daring  construction; 
also  construction  and  equipment  items  of  a  special  and  incidental 
nature  which  can  not  properly  be  charged  to  any  other  fixed 
capital  account. 

Note  A.— This  account  may  include  asultable  proportion  of  supply  expenses 
when  such  expenses  are  not  assignable  to  specific  materials. 

Note  B.— Thisaccount  should  not  include  any  costs  of  organizatiim,  or  any 
costs  or  discounts  connected  with  the  issue  and  disposal  of  stocks,  bonds,  or 
other  securities,  or  commercial  paper. 


!■! 


45 


^ 


i 


INCOME  STATEMENT. 
L  OPEEATING  INCOME. 

Page. 

300.  Telephone  Operating  Revenues 43 

301.  Telephone  Operating  Expenses 43 

Net  Telephone  Operating  Revenues  (or  Deficit). 

302.  Other  Operating  Revenues 43 

303.  Other  Operating  Expenses 43 

304.  Uncollectible  Operating  Revenues 43 

305.  Taxes  Assignable  to  Operations 49 

Operating  Income  (or  Loss). 

n.  nokoperating  eevenues. 

310.  Rent  Revenues  prom  Lease  op  Telephone  Plant....  49 

311.  Miscellaneous  Rent  Revenues 49 

312.  Dividend  Revenues 49 

313.  Interest  Revenues 49 

314.  Sinking  and  Other  Reserve  Fund  Accretions 50 

315.  Profits  from  Operations  op  Others 50 

316.  Miscellaneous  Nonoperating  Revenues 50 

m.  NONOPERATING  REVENUE  DEDUCTIONS. 

320.  Rent  Expense ^^ 

321.  Miscellaneous  Nonoperating  Expense 51 

322.  Nonoperating  Taxes 5^ 

323.  Uncollectible  Nonoperating  Revenues 51 

rV.  DEDUCTIONS  FROM  GROSS  INCOME. 

330.  Rent  Deductions  for  Lease  of  Telephone  Plant 51 

331.  Rent  Deductions  for  Telephone  Offices 51 

332.  Rent  Deductions  for  CoNDurrs,   Poles,   and  Other 

Supports 52 

333.  Rent  Deductions  for  Instruments  and  Equipment.  . .  52 

334.  Miscellaneous  Rent  Deductions 52 

335.  Interest  Deductions  for  Funded  Debt 52 

336.  Other  Interest  Deductions 52 

337.  Loss  ON  Operations  of  Others 53 

338.  Amortization  of  Debt  Discount  and  Expense 53 

339.  Release  of  Premiums  on  Debt — Cr 53 

340.  Amortization  of  Landed  Capital 53 

341.  Miscellaneous  Deductions  from  Income 53 

Net  Income  (or  Loss). 


46 

V.  DISPOSITION  OP  IffET  IHOOME. 

Page. 

350.  Afpropriations    of    Income    to    Sinking    and    Otheb 

Reserve  Funds ^ 

351.  Dividend  Appropriations  of  Income M 

352.  Appropriations  of  Income  for  Construction,  Equip- 

ment, AND  Betterments ^ 

353.  Miscellaneous  Appropriations  of  Income 55 

Income  Balance  Transferred  to  Credit  (or  Debit) 

of  Corporate  Surplus  or  Deficit  Account. 


47 

INSTRUCTIONS  PERTAINING  TO  INCOME  STATEMENT. 

15.  Income  account  dellned.— The  Income  Account  brings  together 
those  accounts  that  show  the  total  amount  of  money  that  the  company- 
has  received  or  become  entitled  to  receive  for  services  rendered  during 
a  given  period,  the  return  accruing  upon  investments  during  the  period 
and  the  disbursements  and  obligaUons  (fixed  charges)  incurred  that 
affect  the  disposition  of  the  amounts  so  received  or  accrued. 

The  sum  total  of  the  credit  balances  in  the  operating  revenue  accounts 
at  the  close  of  a  fiscal  period  diminished  by  the  operating  expenses, 
the  taxes,  and  the  uncollectible  bills  assignable  to  such  operation  gives 
the  operating  income  (or  loss)  for  the  period. 

To  the  net  revenue  (or  deficit)  are  added  the  nonoperating  revenues, 
less  the  nonoperating  revenue  deductions,  which  gives  the  gross  income 
for  the  period. 

From  the  gross  income  are  deducted  various  compulsory  deductions 
grouped  herein  as  "Deductions  from  Gross  Income;"  this  gives  the 
Net  Income  (or  Loss)  for  the  particular  period.  From  the  Net  Income 
are  deducted  such  appropriations  as  are  made  from  Income;  this  gives 
the  amount  that  should  be  carried  to  the  Corporate  Surplus  or  Deficit 
account. 

16.  Taxes.— Separate  accounts  should  be  kept  of  the  taxes  applicable 
to  operating  and  to  nonoperating  revenues,  and,  if  the  company  engages 
in  business  other  than  telephone  operations,  taxes  applicable  to  such 
other  business  should  also  be  kept  separate. 

The  tax  accounts  should  be  charged  each  month  and  an  open 
account  termed  "Tax  Liability  Account"  should  be  concurrently 
credited  with  the  month's  proportion  of  taxes  applicable  to  the 
operations  covered  by  each  account.  If  the  exact  amounts  of  the 
annual  taxes  are  not  known,  they  should  be  estimated  and  one-twelfth 
of  the  estimated  amounts  be  charged  each  month.  From  time  to 
time  during  the  year,  as  the  actual  tax  levies  become  known,  the 
monthly  charges  should  be  adjusted  so  as  to  include  as  nearly  as 
may  be  possible  the  total  amount  of  the  taxes  in  the  period  to  which 
they  apply.  When  any  such  tax  bill  is  actually  paid,  the  "Tax  Lia- 
bility Account"  should  be  debited  with  the  amount  of  the  payment. 
If  the  balance  in  the  "Tax  Liability  Account"  is  a  debit  balance,  due 
to  the  prepayment  of  taxes  applicable  to  a  period  subsequent  to  that 
for  which  the  Income  Account  is  stated,  the  amount  of  the  debit  balance 
should  be  shown  in  account  No.  130,  "Prepaid  Taxes" ;  and  if  the  bal- 
ance is  a  credit  balance  the  amount  should  be  shown  in  account  No. 
166,  "Taxes  Accrued." 

Taxes  on  property  leased  should  be  charged  to  the  appropriate  tax 
account  by  the  party  which,  imder  the  terms  of  the  lease  contract, 
is  obligated  for  such  taxes.  If  the  other  party  to  the  lease,  as  a  mat- 
ter of  convenience,  pays  the  taxes  to  the  government  authorities, 
such  taxes  should  not  enter  its  tax  accounts  but  should  be  charged 
directly  to  the  party  obligated  for  the  taxes. 

The  tax  accounts  must  not  include  any  fees  or  charges  sometimes 
called  Uxes,  such  as  water  taxes,  drainage  taxes,  fire  taxes,  etc.,  which 
are  payments  for  some  specified  service  rendered  by  the  government. 


\ 


•i! 


1 


48 

TEXT  EXPLANATORY  OF  ACCOUNTS  APPEARING  IN  THE 

INCOME  STATEMENT. 

L  OPERATING  INOOME. 

300.  Telephone  Operating  Revenues. 

This  account  should  include  the  total  operating  revenues  de- 
rived from  the  telephone  operations  of  the  company  for  the  period 
covered  by  the  income  account  statement.  (For  the  primary 
operating  revenue  accounts,  see  pp.  61  to  63.) 

301.  Telephone  Operating  Expenses. 

This  account  should  include  the  total  operating  expenses  of  the 
telephone  operations  of  the  company  for  the  period  covered  by 
the  income  account  statement.  (For  the  primary  operating 
expense  accounts,  see  pp.  69  to  77.) 

302.  Other  Operating  Revenues. 

This  account  should  include  the  total  revenues  of  the  company 
derived  from  operations,  other  than  telephone  operations,  for  the 
period  covered  by  the  income  account  statement.  This  account 
includes  the  revenue  derived  from  the  operation  of  property 
carried  in  balance-sheet  account  No.  Ill,  "Miscellaneous  Invest- 
ments," when  such  property  is  operated  by  the  accounting 
company. 

303.  Other  Operating  Expenses. 

This  account  should  include  the  total  expenses  of  operations 
other  than  telephone  operations  for  the  period  covered  by  the 
income  account  statement.  This  account  includes  the  expenses 
of  the  operation  of  property  carried  in  balance-sheet  account 
No.  Ill,  "Miscellaneous  Investments,"  when  such  property  is 
operated  by  the  accoimting  company. 

304.  Uncollectible  Operating  Revenues. 

This  accoimt  should  include  the  amount  of  any  account  for 
telephone  and  other  services  which,  after  a  reasonably  diligent 
effort  to  collect,  has  proved  impracticable  of  collection.  This 
account  includes  only  uncollectible  bills  for  amounts  which  have 
been  treated  as  operating  revenues;  other  uncollectible  bills 
should  be  charged  to  account  No.  323,  "Uncollectible  Nonoperat- 
ing  Revenues,"  or  to  Corporate  Surplus  or  Deficit  account,  as 
may  be  appropriate. 

This  account  may  include  monthly  charges,  based  upon  esti- 
mates, to  create  a  reserve  for  uncollectible  bills,  provided  such 
reserve  is  adjusted  annually  in  accordance  with  the  experience 
of  the  accounting  company.  Such  amounts  should  be  credited 
to  a  subaccount  under  account  No.  118,  "Due  from  Subscribers 
and  Agents,"  to  which  should  be  charged  bills  that  have  proved 
impracticable  of  collection. 


49 

305.  Taxes  Assignable  to  Operations. 

This  account  should  include  Federal,  State,  county,  mu- 
nicipal, and  other  taxing-district  taxes  relating  to  telephone 
property,  operations,  and  privileges  for  the  period  for  which  the 
Income  Account  is  stated .  This  account  should  also  include  the 
taxes  on  other  property  and  operations,  the  revenues  and  expenses 
of  which  are  included  in  accounts  302  and  303,  respectively. 
(See  sec.  16,  p.  47.) 

H  NONOPEEATING  EEVENUES. 

310.  Rent  Revenues  from  Lease  of  Telephone  Plant. 

This  account  should  include  all  revenues  from  the  company^s 
interests  in  telephone  plant  or  equipment  held  by  others  under 
some  form  of  lease  whereby  it  surrenders  possession  of  such 
property  for  operating  purposes. 

Thifl  account  is  intended  to  cover  only  rents  receivable  for  the 
use  of  telephone  exchanges  or  operating  units  held  as  a  whole 
by  others  under  some  form  of  lease. 

311.  Miscellaneous  Rent  Revenues. 

This  account  should  include  the  revenues  accruing  to  the 
company  as  a  return  upon  rented  property  other  than  telephone 
plant  and  equipment,  held  by  others  under  lease,  as  provided 
for  in  the  preceding  account. 

Note.— If  the  property  rented  is  so  Intimately  connected  with  property 
naed  in  the  company's  telephone  operations  that  the  expenses  on  the  former 
can  not  be  ascertained,  the  revenues  should  be  credited  to  account  No.  605, 
"Minor  Rents  of  Exchange  Plant,"  No.  515,  "Minor  Rents  of  ToU  Plant,"  or 
No.  524,  "Rents  from  Other  Operating  Property,"  as  may  be  appropriate, 
and  the  expenses  in  connection  with  the  rented  property  should  be  included 
in  the  operating  expenses. 

812.  Dividend  Revenues. 

This  account  should  include  dividends  declared  on  stocks 
owned  by  the  accounting  company  (and  held  in  its  treasury  or 
deposited  in  trust),  or  controlled  through  lease  or  otherwise,  the 
income  from  which  is  the  property  of  the  accounting  company. 
Accruals  of  guaranteed  dividends  may  be  included  in  this 
account  if  their  payment  is  reasonably  assured. 

Note  A.— This  account  should  not  Include  credits  for  dividends  on  stocks 
Issued  or  asstmied  by  the  accounting  company  and  owned  by  it,  whether  held 
ta  its  treasury,  in  special  deposits,  or  in  sinking  or  other  reserve  funds,  or 
pledged  as  collateral. 

Note  B.— Dividends  on  stocks  of  other  companies  held  in  sinking  or  other 
reserve  funds  should  not  be  Included  In  this  account,  but  should  be  credited 
to  account  No.  314,  "Sinking  and  Other  Reserve  Fimd  Accretions." 

813.  Interest  Revenues. 

This  account  should  include  interest  on  funded  securities  of 
other  companies  owned  by  the  accounting  company  (and  held 


50 


in  its  treasury  or  deposited  in  trust),  or  controlled  through  lease 
or  otherwise,  the  income  from  which  is  the  property  of  the 
accounting  company;  interest  on  notes,  bank  balances,  and 
open  accounts;  and  other  analogous  items  including  discount 
on  short-term  notes.  Interest  accrued  should  not  be  credited 
unless  its  payment  is  reasonably  assured  by  past  experience, 
guaranty,  anticipated  provision  or  otherwise.  In  other  cases 
the  credit  to  this  account  should  be  based  upon  the  interest 
actually  collected. 

NoTK  A.— This  accotmt  should  not  Include  interest  on  ftmded  secoritlea 
issued  or  assumed  by  the  accounting  company  and  owned  by  it,  whether  held 
in  its  treasury,  in  special  deposits,  or  in  sinking  or  other  reserve  funds,  or 
pledged  as  collateral. 

Note  B.— Interest  on  funded  securities  of  other  companies  held  in  sinking 
or  other  reserve  funds  should  not  be  included  in  this  account,  but  in  account 
No.  314,  "Sinking  and  Other  Reserve  Fund  Accretions." 

NoTK  C— At  the  option  of  the  company  there  may  be  included  in  this 
account  the  portion  applicable  to  the  fiscal  period  of  the  amount  requisite  to 
extinguish  (during  the  interval  between  the  date  of  acquisition  and  the  date 
of  maturity)  the  discount  or  premium  on  funded  securities  of  other  companies 
owned. 

314.  Sinking  and  Other  Reserve  Fund  Accretions. 

This  account  should  include  the  revenues  accruing  on  cash, 
securities,  and  other  assets  (other  than  securities  issued  or  assumed 
by  the  accounting  company)  in  the  hands  of  the  trustees  or 
specifically  set  aside  for  sinking  and  other  special  funds. 

Note  A.— At  the  option  of  the  company  there  may  be  included  in  this 
account  the  portion  applicable  to  the  fiscal  period  of  the  amount  requisite  to 
extinguish  (during  the  interval  between  the  date  of  acquisition  and  the  date 
of  maturity)  the  discount  or  premium  on  funded  securities  of  other  companies 
held  in  sinking  or  other  reserve  funds. 

Note  B.— If  the  income  on  any  special  fund  is  retained  in  the  fund 
and  if  the  fund  is  required  to  be  represented  by  a  reserve,  the  amounts 
credited  to  this  account  in  respect  to  such  income  should  be  concurrently 
charged  to  account  No.  350,  "Appropriations  of  Income  to  Sinking  and  Other 
Reserve  Funds,"  and  credited  to  account  No.  172,  "Surplus  Invested  in 
Sinking  Funds,"  or  other  appropriate  resanre  account. 

815.  Profits  from  Operations  of  Others. 

Whenever  in  accordance  with  the  terms  of  any  contract  the 
company  is  entitled  to  participate  in  the  profits  from  operations 
of  others,  all  revenues  accruing  to  the  company  from  such  source 
should  be  credited  to  this  account. 

Note. — This  account  does  not  include  any  dividends  or  other  returns  upon 
securities  issued  by  such  separately  operating  companies,  nor  any  remunera- 
tion for  services  or  the  use  of  property  as  provided  for  in  account  No.  526, 
"Licensee  Revenue— Cr." 

316.  Miscellaneous  Nonoperatino  Revenues. 

This  account  should  include  all  nonopeirating  revenues  not 
provided  for  in  the  foregoing  accounts. 


51 

m  NONOPERATING  REYEinTE  DEDTTOTIOIf& 

320.  Rent  Expense. 

This  account  should  include  all  expenses  in  connection  with 
rented  property,  the  rents  of  which  are  included  in  account 
No.  310  or  No.  311,  such  as  the  cost  of  maintenance  when  borne 
by  the  company,  the  cost  of  negotiating  contracts,  advertising 
for  tenants,  fees  paid  conveyancers,  collector's  commissions, 
cost  of  enforcing  payment  of  rent,  cost  of  ousting  tenants,  etc. 
This  includes  the  exi)ense  accruing  while  the  property  is  idle 
and  awaiting  an  occupant.     It  does  not  include  taxes. 

Note.— If  the  property  rented  is  so  intimately  connected  with  property 
used  in  the  company's  telephone  operations  that  the  expenses  on  the  former 
can  not  be  ascertained,  they  should  be  included  in  the  operating  expenses  and 
the  revenue  should  be  credited  to  account  No.  505,  "Minor  Rents  of  Exchange 
Plant,"  No.  615,  "Minor  Rents  of  Toll  Plant,"  or  No.  S24,  'JRentsfrom 
Other  Opottting  Property,"  as  may  be  appropriate. 

321.  Miscellaneous  Nonoperatino  Expense. 

This  account  should  include  all  expenses  in  connection  with 
nonoperating  revenue  other  than  the  expense  provided  for  in 
account  No.  320,  "Rent  Expense."  This  account  'should 
include  all  expenses  in  connection  with  procuring  interest 
revenue,  dividend  revenue,  profits  from  operations  of  others, 
and  analogous  items.  It  does  not  include  the  taxes  on  such 
investments. 

322.  Nonoperatino  Taxes. 

This  account  should  include  all  taxes  payable  by  the  com- 
pany accrued  upon  nonoperating  property  and  all  taxes  assign- 
able to  nonoperating  revenues.     (See  sec.  16,  p.  47.) 

323.  Uncollectible  Nonoperatino  Revenues. 

When  any  nonoperating  revenues  are  judged  by  the  company 
to  be  uncollectible,  the  amount  thereof  should  be  credited  to 
the  account  in  which  theretofore  charged  and  charged  to  thii 
account. 

.    rV.  DEDUCTIONS  FROM  GROSS  INCOME. 

330.  Rent  Deductions  for  Lease  of  Telephone  Plant. 

This  account  should  include  all  amounts  accrued  against 
the  company  for  rent  of  telephone  plant  and  equipment  which 
it  holds  under  some  form  of  lease  from  another,  and  of  which 
for  operating  purposes  it  has  the  exclusive  possession. 

This  account  is  intended  to  cover  only  rents  payable  for  the 
use  of  telephone  exchanges  or  operating  units  held  as  a  whole 
under  some  form  of  lease. 

331.  Rent  Deductions  for  Telephone  Offices. 

This  account  should  include  the  rents  payable  accruing  for 
use  of  general  oflices  and  central  and  branch  telephone  offices 


i 

i 

i 


52 


owned  by  others,  excepting  rentfl  for  which  provisions  are  here- 
inafter made  under  "Clearing  accounts."     (See  p.  77.) 

Note.— Where  rent  payments  cover  services,  light,  heat,  etc.,  and  mainte- 
naiice,  in  addition  to  a  return  upon  investment,  an  apportionment  should  be 
made  of  the  rent  payment  and  the  amount  representing  interest  and  main- 
tenance (estimated,  if  not  known)  should  be  charged  to  this  aooount,  the 
balance  of  the  payment  being  charged  to  the  appropriate  expense  aooounts. 
Where  repairs  of  rented  buildings  are  made  by  the  company,  the  cost  of  such 
rexwirs  should  be  charged  to  the  appropriate  operating  expense  or  other 
accounts. 

332.  Rent  Deductions  por  Conduits,  Poles,  and  Other  Supports. 

This  account  should  include  the  rents  payable  accruing  for  the 
use  of  ducts,  conduits,  or  subways  owned  by  others  and  rents  for 
the  use  of  poles,  fences,  or  buildings  a^  supports  for  the 
telephone  lines  of  the  accounting  company. 

333.  Rent  Deductions  for  Instruments  and  Equipment. 

This  account  should  include  the  rents  payable  accruing  for 
telephone  instruments  and  equipment  owned  by  others. 

This  account  does  not  include  amounts  paid  licensor  telephone 
companies  under  an  agreement  to  pay  a  certain  percentage  of 
revenues  for  use  of  instruments,  privilege  of  connection,  etc. 

334.  Miscellaneous  Rent  Deductions. 

This  account  should  include  rents  payable  accrued  not  pro- 
vided for  elsewhere. 

Note.— Rent  of  tools,  equipment,  or  other  facilities  used  for  construction 
should  not  be  included  In  this  account,  but  in  the  i4>propriate  fixed  capital 
account. 

335.  Interest  Deductions  for  Funded  Debt. 

This  account  should  include  all  interest  accrued  on  out- 
standing funded  debt  and  debenture  stock  issued  or  assumed 
by  the  company.  This  account  does  not  include  interest  on 
securities  held  by  the  company  in  its  treasury,  in  sinking  or 
other  reserve  funds,  or  pledged  as  collateral. 

Note  A.— Interest  accruing  on  funded  securities  after  maturity  should  not 
be  included  in  this  account,  but  in  account  No.  336,  "Other  Interest  Deduc- 
tions." 

Note  B. — If  any  of  the  funded  debt  securities  issued  or  assumed  by  the 
company  are  held  in  its  sinking  or  other  reserve  funds  and  the  interest  on 
such  funded  debt  is  an  accretion  to  the  fund,  the  interest  on  such  securities 
should  not  be  charged  to  this  account,  but  an  amount  equal  to  the  interest  on 
the  funded  debt  so  held  should  be  charged  to  account  No.  350,  "Appropria- 
tions of  Income  to  Sinking  and  Other  Reserve  Funds."  This  does  not  apply 
to  securities  carried  in  account  No.  127,  "  Provident  Fund  Assets." 

336.  Other  Interest  Deductions. 

This  account  should  include  all  interest  accrued  on  unfunded 
debt,  such  as  short-term  notes  payable  on  demand  or  having 
dates  of  maturity  one  year  or  less  from  date  of  issue,  and  open 
accounts  and  other  analogous  items,  including  discount  on  short- 
term  notes;  also  interest  accruing  on  funded  debt  securities 
after  maturity  of  debt. 


i^ 


I 


I 


53 

337.  Loss  ON  Operations  of  Others. 

Whenever,  in  accordance  with  the  terms  of  any  contract,  the 
company  is  bound  to  contribute  toward  reimbursement  of  the 
losses  resulting  from  the  operations  of  others,  all  liabilities  against 
the  company  accruing  from  such  source  should  be  charged  to 
this  account. 

338.  Amortization  of  Debt  Discount  and  Expense. 

Charge  to  this  account  during  each  fiscal  period  the  propor- 
tion of  the  unamortized  discount  and  expense  on  outstanding 
funded  debt  which  is  applicable  to  the  period.  (See  sec.  7, 
p.  14.) 

339.  Release  of  Premiums  on  Debt — Cr. 

Credit  to  this  account,  during  each  fiscal  period  the  propor- 
tion of  the  premium  at  which  outstanding  funded  debt  was 
issued  which  is  applicable  to  the  period.     (See  sec.  7,  p.  14.) 

340.  Amortization  op  Landed  Capftal. 

Charge  to  this  account  during  each  fiscal  period  such  portion 
of  the  original  money  cost  (estimated,  if  not  known)  of  landed 
capital  as  carried  in  account  No.  207,  "Right  of  Way,"  and 
No.  211,  **Land,  "  as  is  necessary  to  cover  the  proportion  of  life 
thereof  expired  during  such  period. 

Note  A.— The  amounts  charged  to  this  account  should  be  concurrently 
credited  to  accotmt  No.  103,  "  Reserve  for  Amortization  of  Intangible  Capital— 
Cr." 

Note  B.— When  any  landed  capital  expires  or  is  otherwise  retired 
from  service  (as  e.  g.,  through  sale)  the  fixed  capital  account  or  invest- 
ment account,  if  any,  originally  charged  therewith  should  be  credited 
with  the  amount  originally  charged,  account  No.  103,  "Reserve  for  Amor- 
tization of  Intangible  Capital— Cr.,"  should  be  debited  with  all  amounts 
theretofore  credited  to  such  account  in  respect  of  such  capital  so  going  out  of 
service;  the  appropriate  account  should  be  debited  with  the  proc-eeds  of  sale, 
if  any,  and  any  necessary  adjustment  should  be  made  through  the  Corporate 
Surplus  or  Deficit  account. 

341.  Miscellaneous  Deductions  from  Income. 

This  account  should  include  all  deductions  from  gross  income 
which  are  in  the  nature  of  fixed  charges  but  not  otherwise  pro- 
vided for,  such  as  those  required  by  the  terms  of  some  contract, 
agreement,  charter  provision,  law,  or  ordinance.  Such  deductions 
should  not  include  any  appropriations  or  dispositions  of  income 
that  rest  solely  in  the  discretion  of  the  accounting  company. 

V.  DISPOSITION  OF  NET  INCOME. 

350.  Approprl\tion8  of  Income  to  Sinking  and  Other  Reserve 

Funds. 

This  account  should  include  amounts  of  appropriations  of 

income  for  sinking  and  other  reserve  funds.    The  terms  of 

mortgages,  deeds  of  trust,  or  other  contracts  providing  for  the 

allocation  of  income  or  for  the  pajTuent  of  definite  sums  into 


54 


sinkiiig  and  other  reserve  funds,  and  for  accretions  to  such 
funds  on  account  of  income  from  pre\dous  investments,  may  be 
made  the  basis  of  such  appropriations. 

The  appropriations  for  payments  or  accretions  to  the  funds 
may  include  amounts  equal  to  (1)  direct  payments;  (2)  the 
interest  or  dividends  on  securities  issued  or  assumed  by  the 
accounting  company  and  held  in  such  funds;  (3)  the  income 
from  investments  in  securities  (other  than  those  issued  or 
assumed  by  the  accounting  company)  held  in  such  funds;  and 
(4)  the  income  from  cash  and  other  property  held  in  such  funds. 

NoTK  A. — The  amounts  charged  to  this  aocount  should  be  concurrently 
credited  to  account  No.  172,  "Surplus  Invested  In  Sinking  Funds,"  or  other 
appropriate  reserve. 

Note  B.— If  appropriations  for  direct  pajrments  are  made  fh>m  surplus, 
they  should  be  charged  to  account  No.  411,  "Appropriations  of  Surplus  to 
Sinking  and  Other  Reserve  Funds. " 

361.  Dividend  Appropriations  op  Income. 

This  account  should  include  dividends  on  outstanding  capital 
stock  issued  or  assumed  by  the  accounting  company  (other  than 
that  held  by  it),  if  declared  from  income. 

This  account  should  be  subdivided  so  as  to  show  separately 
the  dividends  on  the  various  classes  of  capital  stock. 

If  a  dividend  is  payable  in  any  thing  other  than  money,  such 
thing  should  be  described  in  the  entry  with  sufficient  particu- 
larity to  identify  it. 

Note  A.— This  accoimt  should  include  the  dividends  declared  out  of 
income  on  all  classes  of  capital  stock,  except  debenture  stock.  The  payments 
on  debenture  stock  should  be  charged  to  account  No.  335,  "Interest  Deduc- 
tions for  Funded  Debt. " 

Note  B. — This  account  should  not  include  charges  for  dividends  on  capital 
stock  issued  or  assumed  by  the  accounting  company  and  owned  by  it,  whether 
held  in  its  treasury,  in  special  deposits,  or  in  sinking  or  othor  reserve  funds, 
or  pledged  as  collateral.  (See  account  No.  350,  "Appropriations  of  Income 
to  Sinking  and  Other  Reserve  Funds. ") 

Note  C— This  account  should  be  used  if  the  appropriations  are  definitely 
made  as  chargeable  to  income.  If  simflar  appropriations  arc  made  from 
surplus,  they  should  be  charged  to  account  No.  412,  "  Dividend  Appropri&> 
tions  of  Surplus. " 

352.  Appropriations  of  Income  for  Construction,   Equipment, 
AND  Betterments. 
This   account   should    include   amounts   appropriated    from 
income  for  construction  and  equipment  and  for  betterments  of 
property  carried  in  fixed  capital  accounts. 

These  amoimts  should  be  subdivided  so  as  to  show — (a)  amounts 
expended  during  preceding  fiscal  periods,  (6)  amoimts  expended 
during  the  current  fiscal  period,  and  (c)  amounts  held  in  reserve. 

Note.— This  account  should  be  used  if  the  appropriations  are  definitely 
made  as  chargeable  to  income.  If  similar  appropriations  are  made  from 
surplus,  they  should  be  charged  to  account  No.  415,  "Appropriations  of  Sur- 
plus for  Construction,  Equipment,  and  Betterments." 


55 


363.  Miscellaneous  Approprl^tions  of  Income. 

This  account  should  include  appropriations  of  income  not 
provided  for  elsewhere. 

Note.— This  account  should  be  used  if  the  appropriations  are  definitely 
made  as  chargeable  to  income.  If  similar  appropriations  ara  made  from 
surplus,  they  should  be  charged  to  account  No.  416,  "Miscellaneous  Appro- 
priations of  Surplus. " 


56 


CORPORATE  SURPLUS  OR  DEFICIT  ACCOUNT. 

I.  CREDITS. 

Balance  (at  beginning  of  fiscal  period).  Page. 

400.  Credit  Balance  Transferred  from  Income  Account..  .  57 

401.  Miscellaneous  Additions  to  Surplus 57 

Bam>nce  Debit  (at  end  of  fiscal  period)  Carried  to 

Balance  Sheet. 

n.  DEBITS. 

Balance  (at  beginning  of  fiscal  period). 

410.  Debit  Balance  Transferred  From  Income  Account...        57 

411.  Appropriations   of   Surplus   to   Sinking   and   Other 

Reserve  Funds 57 

412.  Dividend  Appropriations  of  Surplus ' 58 

413.  Realized  Depreciation  not  Covered  by  Reserves...  68 

414.  Amortization  Unprovided  for  Elsewhere 58 

415.  Appropriations  of  Surplus  for  Construction,  Equip- 

ment, AND  Betterments 58 

416.  Miscellaneous  Appropriations  of  Surplus 59 

417.  Other  Deductions  from  Surplus 59 

Balance  Credit  (at  end  of  fiscal  period)  Carried  to 

Balance  Sheet. 

INSTRUCTIONS    PERTAINING    TO    CORPORATE    SURPLUS 

OR  DEFICIT  ACCOUNT. 

17.  Corporate  surplus  or  deficit  account  defined. — This  account  or 
summary  is  the  connecting  link  between  the  Income  Account  and  the 
Balance  Sheet.  It  summarizes  the  changes  in  the  corporate  surplus 
or  deficit  during  a  given  fiscal  period  resulting  from  the  operations  and 
the  business  transactions  during  that  period,  as  well  as  those  effected  by 
any  disposition  of  net  profits  made  solely  at  the  option  of  the  company 
by  accounting  adjustments  not  properly  attributable  to  the  period,  or 
by  miscellaneous  losses  or  gains  not  provided  for  elsewhere.  The  cor- 
porate surplus  or  deficit  should  be  shown  on  the  balance-sheet  state- 
ment under  account  No.  137,  "Corporate  Deficit,"  or  No.  174,  "Corpo- 
rate Surplus  Unappropriated." 


•< 


:"» 


f" 


57 

TEXT     EXPLANATORY     OF     CORPORATE     SURPLUS     OR 

DEFICIT  ACCOUNT. 

L  CREDITS. 

400.  Credit  Balance  Transferred  from  Income  Account. 

Under  this  title  should  be  shown  the  amount  of  net  income 
brought  forward  from  the  Income  Account. 

401.  Miscellaneous  Additions  to  Surplus. 

This  account  should  include  amounts  (not  provided  for  else- 
where) transferred  to  Surplus  from  other  accounts  and  amounts 
representing  increases  in  resources  not  properly  assignable  to 
the  income  of  the  fiscal  period  for  which  the  accounts  are  stated. 
Among  the  items  which  should  be  credited  to  this  account  are, 
for  example — 

Adjustment  or  cancellaUon  of  old  balance-sheet  accounts 
(other  than  fixed  capital). 

Profits  derived  from  the  sale  of  property  carried  in  account 
No.  Ill,  "Miscellaneous  Investments." 

Credits  resulting  from  adjustments  required  to  bring  to  par 
securities  issued  or  assumed  by  the  accounting  company  and 
reacquired  at  a  cost  less  than  the  par  value. 

Premium  on  capital  stock  at  the  time  of  its  retirement. 

Unextinguished  premiums  on  funded  debt  retired  before 
maturity. 

n.  DEBITS. 

410.  Debit  Balance  Transferred  prom  Income  Account. 

Under  this  title  should  be  shown  the  amount  of  net  loss 
brought  forward  from  the  Income  Account. 
Appropriations  of  Surplus  to  Sinking  and  Other  Reserve 
Funds. 

This  account  should  include  amounts  of  appropriations  of 
surplus  for  sinking  and  other  reserve  funds.  The  terms  of 
mortgages,  deeds  of  trust,  or  other  contracts  providing  for  the 
allocation  of  surplus  or  for  the  payment  of  definite  amounts 
into  sinking  and  other  reserve  funds  may  be  made  the  basis  of 
such  appropriations. 

Note  A.— This  account  should  be  used  If  the  appropriations  are  definitely 
made  as  chargeable  to  surplus.  If  similar  appropriations  are  made  from 
income,  they  should  be  charged  to  account  No.  350,  "Appropriations  of  Income 
to  Sinking  and  Other  Reserve  Funds." 

Note  B.— If  appropriations  are  made  to  cover  the  income  accruing  on 
sinking-fund  assets  and  to  cover  amounts  equivalent  to  interest  on  securities 
issued  or  assumed  by  the  accounting  company  and  held  in  such  funds,  the 
amounts  of  such  appropriations  should  not  be  included  in  this  account,'  but 
should  be  Included  in  account  No.  350,  "Appropriations  of  Income  to  Sinking 
and  Other  Reserve  Funds."  If  appropriations  are  made  to  cover  sums 
equivalent  to  dividends  on  stock  issued  or  assumed  by  the  accounting  com- 
pany and  held  in  such  funds  the  amounts  of  such  appropriations  may  be 
Included  In  this  account  or  in  account  No.  350,  according  as  the  dividend  is 
declared  from  surplus  or  from  income. 


411 


58 


59 


! 

I 


N(yri5C.-The  amounts  charged  to  this  acooont  should  be  concwrently 
credited  to  balance-sheet  account  No.  172,  "Surplus  Invested  In  Sinking 
Funds,"  or  other  appropriate  reserve  accounts. 

412    DivroEND  Appropriations  of  Surplus. 

This  account  should  include  dividends  on  outstanding  capi- 
tal stock  issued  or  assumed  by  the  accounting  company  (other 
than  that  held  by  it),  if  declared  from  surplus. 

This  account  should  be  subdivided  so  as  to  show  separately 
the  dividends  on  the  various  classes  of  capital  stock. 

If  a  dividend  is  payable  in  any  thing  other  than  money, 
such  thing  should  be  described  in  the  entry  with  sufficient 
particularity  to  identify  it. 

Note  A— This  account  includes  the  dividends  declared  from  surplus 

on  all  classes  of  capital  stock  except  debenture  stock.    The  payments  on 

debenture  stock  should  be  charged  to  account  Na  335,  "  Interest  Deductions 

for  Funded  Debt."  .     .._^^     ^  ,*  • 

NOTB  B.— This  account  should  not  include  charges  for  dividends  on  capital 
stock  issued  or  assumed  by  the  accounting  company  and  owned  by  it.  whether 
held  in  its  treasury,  in  special  deposits,  or  sinking  or  other  reser>'e  funds,  or 
pledged  as  collateral.  (See  account  No.  411,  "Appropriations  of  Surplus  to 
Sinking  and  Other  Reserve  Funds.") 

Nom— This  account  should  be  used  if  appropriations  are  definitely  made 
as  chargeable  to  surplus.    If  similar  appropriations  are  made  from  income, 
they  should  be  charged  to  account  No.  351,  "Dividend  Appropriations  of 
Income." 
413    Realized  Depreciation  not  Covered  by  Reserves. 

Charge  to  this  account  the  realized  depreciaUon  (i.  e.,  the 
difference  between  the  original  cost  and  the  salvage,  if  any)  on 
tangible  fixed  capital  retired,  if  such  depreciation  has  not  been 
provided  for  through  a  depreciation  reserve.  This  includes  such 
portion  of  the  reaUzed  depreciation  on  any  physical  property 
which  was  installed  prior  to  the  period  for  which  the  reserve 
was  established  as  is  due  to  life  in  service  before  that  period. 
This  portion  may  be  estimated  on  the  basis  of  the  proportion 
which  the  Ufe  in  service  of  the  property  in  question  prior  to 
the  period  for  which  the  reserve  was  established  bears  to  its 
entire  life  in  service.  (See  sec.  23,  p.  67.) 
414   Amortization  Unprovided  for  Elsewhere. 

Charge  to  this  account,  when  any  intangible  property  expires 
or  is  relinquished,  such  portion  of  its  cost  as  has  not  been  pre- 
viously written  off  or  is  not  covered  by  account  No.  103, '  *  Reserve 
for  Amortization  of  Intangible  Capital--Cr."  Charge  also  to 
this  account  all  optional  amortization,  such  as  that  of  assets  car- 
ried in  accounts  No.  201,  " Organization  "  and  No.  204,  "Other 

Intangible  Capital." 
415.  Appropriations  of  Surplus  for  Construction,  Equipment, 

AND  Betterments.  ^ 

This  account  should  include  amounts  appropriated  from 
surplus  for  construction  and  equipment  and  for  betterments 
of  property  carried  in  the  fixed  capital  accounts. 


These  amounts  should  be  subdivided  so  as  to  show  (a)  amounts 

expended  during  preceding  fiscal  periods,  (6)  amounts  expended 

during  the  current  fiscal  period,  and  (c)  amounts  held  in  reserve. 

Note.— This  account  should  be  used  if  appropriations  are  definitely  made  as 
chargeable  to  surplus.  If  similar  appropriations  are  made  from  income,  they 
should  be  charged  to  account  No.  352, "  Appropriations  of  Income  for  Construc- 
tion, Equipment,  and  Betterments." 

416.  Miscellaneous  Appropriations  of  Surplus. 

This  account  should  include  appropriations  of  surplus  not 
provided  for  elsewhere. 

Note.— This  account  should  be  used  when  the  appropriations  are  definitely 
made  as  chargeable  to  surplus.  If  similar  appropriations  are  made  from 
income,  they  should  be  charged  to  account  No.  353,  "  Miscellaneous  Appropria- 
tions of  Income." 

417.  Other  Deductions  from  Surplus. 

This  account  should  include  amounts  (not  provided  for  else- 
where) transferred  from  Surplus  to  other  accounts,  amounts 
written  off  in  consequence  of  adjustments,  and  payments  not 
properly  chargeable  to  Income  for  the  fiscal  period  for  which 
the  accounts  are  stated.  Among  the  items  which  should  be 
charged  to  this  account  are,  for  example: 

Adjustment  or  cancellation  of  old  balance-sheet  accounts 
(other  than  fixed  capital). 

Losses  resulting  from  the  sale,  destruction,  or  retirement  of 
property  carried  in  account  No.  Ill,  "Miscellaneous  Invest- 
ments." 

Losses  resulting  from  adjustments  required  to  bring  to  par 
securities  issued  or  assumed  by  the  accounting  company  and 
reacquired  at  a  cost  exceeding  the  par  value. 

Deductions  made  to  extinguish  discount  on  capital  stock. 

Deductions  made  to  amortize  debt  discount  and  expense  when 
not  properly  cliargeable  to  income. 

Note.— a  complete  analysis  of  this  account  will  be  required  in  annual 
reports  of  the  company  to  the  Commission. 


60 


61 


OPERATING  REVENUE  ACCOUNTS. 
L  EXOHANGE  SERVIOE  REVENUES. 

Page. 

500.  Subscribers'  Station  Revenues 61 

501.  Public  Pay  Station  Revenues 61 

502.  Miscellaneous  Exchange  Service  Revenues 61 

503.  Service  Stations 61 

504.  Private  Exchange  Lines 61 

505.  Minor  Rents  of  Exchange  Plant 61 

606.  Other  Exchange  Revenues 61 

n.  TOLL  SEEVIOE  REVENUES. 

510.  Message  Tolls 62 

511.  Miscellaneous  Toll  Line  Revenues 62 

512.  Leased  Toll  Lines 62 

513.  Telegraph  Tolls 62 

514.  Telegraph  Service  on  Toll  Lines 62 

515.  Minor  Rents  of  Toll  Plant 62 

516.  Other  Toll  Line  Revenues 62 

m.  MISCELLANEOUS  OPERATING  REVENUEa 

620.  Messenger  Service 63 

621.  Telegraph  Commissions 63 

622.  Other  Telegraph  Service  Charges 63 

623.  Advertising  and  Directory 63 

624.  Rents  from  Other  Operating  Property 63 

626.  Other  Miscellaneous  Revenue 63 

626.  Licensee  Revenue — Cr 63 

527.  Licensee  Revenue — Dr 63 

INSTRUCTIONS    PERTAINING    TO    OPERATING    REVENUE 

ACCOUNTS. 

18.  Operating  revenues  defined. — By  operating  revenues  are  meant 
all  amounts  of  money  which  the  company  receives  or  becomes  law- 
fully entitled  to  recover  for  services  rendered  and  as  a  return  upon 
property  used  by  the  company  in  its  own  operations.  Credits  to  the 
various  revenue  accounts  should  be  based  upon  the  gross  charges  made 
for  services  rendered  by  the  company. 

19.  Deductions  from  revenues.— Discounts  allowed  subscribers  for 
prompt  payment,  corrections  of  overcharges,  overcol lections  thereto- 
fore credited  and  afterwards  cort-ected,  authorized  refunds  on  account 
of  failures  in  transmission,  and  other  corrections  should  be  charged  to 
the  revenue  account  to  which  they  relate. 

20.  Commissions. — Commissions  paid  to  attendants  at  pay  stations 
and  to  employees  or  others  in  lieu  of  salaries  should  be  chained  to  appro- 
priate expense  accounts  and  not  to  Xhe  revenue  accounts. 


TEXT  EXPLANATORY  OF  OPERATING  REVENUE  ACCOUNTS. 
I  EXOHANGE  SERVICE  REVENUES. 

600.  Subscribers  Station  Revenues. 

This  account  should  include  all  revenues  from  subscribers  for 
exchange  service,  extension  stations,  private  branch  exchanges, 
and  other  exchange  service  stations,  whether  the  charge  is  based 
upon  a  flat  rate  or  measured  rate.  Include  in  this  account,  also, 
charges  made  for  the  insertion  of  extra  names  in  directory  and 
for  use  of  extra  exchange  mileage  in  circuits  to  subscribers'  sta- 
tions, installation  and  cancellation  charges,  and  any  commissions 
on  telegraph  tolls  received  in  lieu  of  rent  for  exchange  lines. 

601.  Public  Pay  Station  Revenues. 

This  account  should  include  all  revenues  from  exchange  service 
at  public  pay  stations.  This  account  should  not  include  revenues 
•  from  regular  subscribers'  stations  having  measured  service  or  coin 
box  service  at  standard  rates.  The  amount  credited  to  this 
account  should  be  the  gross  amount  collected  or  due  at  tariff  rates; 
commissions  allowed  attendants  or  others  for  pay  station  tolls 
should  be  debited  to  account  No.  648,  "Pay  Station  Commis- 


602 


rions,"  and  not  to  this  "account. 


A 


603. 


604. 


Miscellaneous  Exchange  Service  Revenues. 

This  account  should  include  all  revenues  derived  from  ex- 
change service  other  than  from  subscribers'  stations  or  public 
pay  stations,  as  provided  for  in  the  following  subaccounts: 
Service  Stations. 

This  account  should  include  switching  charges  and  other 
revenues  derived  from  stations,  the  Unes  and  equipments  for 
which  are  owned  wholly  or  in  part  by  others,  but  to  which  the 
accounting  company  furnishes  exchange  service. 
Private  Exchange  Lines. 

This  account  should  include  all  revenues  derived  from  tele- 
phone  Unes,  equipment,  and  instruments  forming  part  of  the 
company's  exchange  plant  and  leased  to  others  for  use  as  private 
Unes  but  without  exchange  connections  with  other  subscribers 

605.  Minor  Rents  of  Exchange  Plant. 

This  account  should  include  all  revenues  derived  from  attach- 
ments to  exchange  poles,  the  use  of  exchange  conduits,  and  other 
minor  rents  from  exchange  plant  where  such  property  is  main- 
tained by  the  accounting  company,  and  the  cost  of  such  mainte- 
nance can  not  be  separated  from  the  expense  of  maintaining 
the  rented  property.  This  account  should  not  Include  rents 
for  equipment  leased  to  licensees  under  an  arrangement  for  a 
division  of  revenues  as  provided  for  in  account  No.  526  "Li- 
censee Revenue— Cr."  ' 

606.  Other  Exchange  Revenues. 

This  account  should  include  all  exchange  service  revenues 
not  provided  for  elsewhere. 


/ 


62 


63 


n  TOLL  8EEVI0E  REYENUES. 

510.  Message  Tolls. 

This  account  should  include  all  revenues  derived  from  messages 
transmitted  wholly  over  the  company 's  lines  between  stations  in 
different  exchange  areas  and  for  which  a  charge  is  made  that  is 
not  included  in  contracts  with  subscribers  for  station  service; 
also  the  accounting  company's  proportion  of  tolls  on  messages 
transmitted  by  the  joint  use  of  its  own  and  other  lines. 

511.  Miscellaneous  Toll  Line  Revenues. 

This  account  should  include  all  toll  service  revenues  (other 
than  message  tolls),  as  provided  for  in  the  following  subaccounts: 

512.  Leased  Toll  Lines. 

This  account  should  include  all  revenues  derived  from  toll 
lines  (including  the  terminal  exchange  circuits)  leased  by  others 
imder  contracts  giving  exclusive  telephone  use  either  con- 
tinuously or  during  stated  periods.  Such  plant  may  be  leased 
in  connection  with  private  branch  exchange  or  private  exchange 
line  installations. 

Note.— Revenues  from  private  branch  exchanges  or  private  lines,  the 
contracts  for  which  provide  for  the  use  of  toil  circuits,  should  be  divided 
(by  estimate,  if  necessary)  between  Exclfange  Revenue  and  Toll  Revenue. 

513.  Telegraph  Tolls. 

This  account  should  include  all  revenues  received  from  tele- 
graph companies  for  the  use  of  toll  lines  for  telephoning  tele- 
grams and  cablegrams. 

514.  Telegraph  Service  on  Toll  Lines. 

This  account  should  include  all  revenues  derived  from  the 
use  of  toll  lines  for  telegraph  circuits  whether  such  lines  are 
used  by  telegraph  companies,  brokers,  or  others. 

515.  Minor  Rents  of  Toll  Plant. 

This  account  should  include  all  revenues  derived  from  attach- 
ments to  toll  poles,  the  use  of  toll  conduits,  and  other  minor  rents 
from  toll  plant  where  such  property  is  maintained  by  the  ac- 
counting company,  and  the  cost  of  such  maintenance  can  not 
be  separated  from  expense  of  maintaining  the  rented  property. 
This  account  should  not  include  rents  from  equipment  leased 
to  licensees  under  an  arrangement  for  a  division  of  revenues 
as  provided  for  in  account  No.  526,  "Licensee  Revenue — Cr. " 

516.  Other  Toll  Line  Reveniues. 

This  account  should  include  all  toll  line  revenues  not  pro- 
vided for  elsewhere. 


\i 


m.  MISOELLANEOUS  OPERATING  REVENUES. 

520.  Messenger  Service. 

This  account  should  include  all  revenues  derived  from  mes- 
senger service. 

521.  Telegraph  Commissions. 

This  account  should  include  all  commissions  receivable  for 
the  collection  of  telegraph  and  cable  tolls  on  messages  trans- 
mitted between  telegraph  offices  and  their  patrons  and  upon 
which  the  accounting  company  undertakes  to  make  collection. 

522.  Other  Telegraph  Service  Charges. 

This  account  should  include  all  revenues  (not  classed  as  tele- 
graph commissions  or  telegraph  tolls)  received  from  telegraph 
companies  for  services  rendered  by  the  telephone  company's 
employees  in  joint  telephone  offices  in  connection  with  telegraph 
and  cable  messages,  such,  for  example,  as  receiving  messages 
from  the  public  and  quoting  rates. 

523.  Advertising  and  Directory. 

This  account  should  include  all  revenues  derived  from  adver- 
tising in  directories  and  elsewhere. 

524.  Rents  from  Other  Operating  Property. 

This  account  should  include  all  revenues  accruing  from'  the 
rent  of  buildings  and  other  property  (except  leased  wires,  poles, 
conduits,  and  equipment  covered  by  accounts  No.  505,  ** Minor 
Rents  of  Exchange  Plant,"  and  No.  515,  "Minor  Rents  of  Toll 
Plant, ' '),  when  such  property  is  used  also  by  the  company  and  the 
;  expense  of  maintaining  and  operating  the  rented  portion  can 
not  be  separated  from  the  total  expense. 

525.  Other  Miscellaneous  Revenue. 

This  account  should  include  all  miscellaneous  operating  reve- 
nues not  provided  for  elsewhere.    This  accoimt  does  not  include . 
nonoperating  revenue  as  provided  for  in  accounts  Nos.  310  to 
316,  inclusive. 

526.  Licensee  Revenue — Cr. 

When  a  telephone  company  grants  to  another  telephone 
company  the  use  of  its  patents  or  furnishes  instruments  and 
equipment  and  general  supervision  under  an  agreement  for 
apportioning  the  revenues  of  the  licensee,  the  proportion  accru- 
ing to  the  licensor  should  be  included  by  the  licensor  in  this 
account. 
627.  Licensee  Revenue — Dr. 

When  a  telephone  company  is  granted  by  another  telephone 
company  the  use  of  its  patents,  or  is  furnished  instruments  and 
equipment  and  general  supervision  under  an  agreement  for 
apportioning  the  revenues  of  the  Ucensee,  the  proportion  accru- 
ing to  the  licensor  should  be  included  by  the  licensee  in  this 
account. 


64 


65 


OPERATING  EXPENSE  ACCOUNTS. 
L  MATNTENANOE  EXPENSES. 

601.  Supervision  op  Maintenance qq 

602.  Repairs  of  Aerial  Plant 99 

603.  Repairs  op  Underground  Plant 09 

604.  Repairs  op  Central  Office  Equipment 69 

605.  Repairs  of  Station  Equipment 70 

606.  Repairs  of  Buildings  and  Grounds 70 

607.  Station  Removals  and  Changes 70 

608.  Depreciation  of  Plant  and  Equipment 71 

609.  Extraordinary  Depreciation 7x 

610.  Other  Maintenance  Expenses 71 

611.  Repairs  Charged  to  Reserves — Cr 71 

n  trapfio  expenses. 

620.  Central  Office  Superintendence 7x 

621.  Traffic  Superintendence 72 

622.  Service  Inspection 72 

623.  Clerical  Operating  Wages 72 

624.  Operators'  Wages 72 

625.  Central  Office  Supplies  and  Expenses 72 

626.  Rest  and  Lunch  Rooms 72 

627.  Operators'  Schooling 72 

628.  Trwnsmission  Power 72 

629.  Central  Offijce  Stationery  and  Printing 72 

630.  Messenger  Service 72 

631.  Miscellaneous  Central  Office  Expenses 73 

632.  Pay  Station  Expenses 73 

633.  Other  Traffic  Expenses 73 

m.  OOMMEEOIAL  EXPENSES. 

640.  Commercla-l  Administration 73 

641.  Promotion  Expenses 73 

642.  Advertising 73 

643.  Canvassing 73 

644.  Sublicensee  Relations 74 

645.  Collection  Expenses : 74 

646.  Revenue  Accounting 74 

647.  Revenue  Collecting 74 

648.  Pay  Station  Commissions 74 

649.  Directory  Expenses 74 

650.  Other  Commercla.l  Expenses 74 


i 


IV.  GENEEAL  AND  mSOELLANEOTTS  EXPEBSES. 

Page. 

660.  General  Office  Salaries 74 

661.  Salaries  o/General  Officers 74 

662.  Salaries  o/General  Office  Clerks 74 

663.  General  Office  Supplies  and  Expenses 75 

664.  Expenses  o/General  Officers  and  Clerks 75 

665.  General  Office  Stationery  and  Printing 75 

666.  Other  General  Office  Supplies  and  Expenses 75 

667.  General  Law  Expenses 75 

668.  Insurance 75 

669.  Accidents  and  Damages 75 

670.  Law  Expenses  Connected  with  Damages 76 

671.  Miscellaneous  General  Expenses 76 

672.  Relic/  Department  and  Pensions 75 

673.  Telephone  Franchise  Requirements 75 

674.  Amortization  0/  Franchises  and  Patents 77 

675.  Other  General  Expenses 77 

676.  Telephone  Franchise  Requirements — Cr 77 


66 


67 


INSTRUCTIONS    PERTAINING    TO    OPERATING    EXPENSE 

ACCOUNTS. 

21.  Bepairs  deflned. — Repairs,  as  used  in  the  text  of  the  various 
operating  expense  accounts,  includes  ordinary  and  extraordinary 
repairs. 

Ordinary  repairs  include: 

(a)  Testing  for,  locating,  and  clearing  crosses,  breaks,  grounds,  and 
other  line  troubles,  including  routine  work  intended  to  prevent  such 
troubles,  as,  for  example,  pulling  up  slack,  tightening  guys  and  reset- 
ting guy  stubs,  trimming  trees,  straightening  poles  and  cross  arms,  and 
cleaning  and  adjusting  apparatus; 

(6)  Replacements  of  minor  or  short-lived  parts  of  structures,  equip- 
ment, or  facilities; 

(c)  Replacements  of  minor  parts  of  wire  plant  or  equipment  made 
necessary  by  reason  of  faulty  adjustments,  excessive  strains,  mechanical 
injuries,  or  other  minor  casualties,  not  provided  against  in  the  chai^  for 
depreciation  of  plant  and  equipment; 

((f)  Rearrangements  and  changes  in  location  of  plant,  except  sub- 
scribers' station  equipment  (for  which  a  special  account  is  provided). 
This  includes  rearrangements  of  circuits,  reaasociation  of  party  lines, 
rearranging  ^ouping  of  trunks  and  calling  circuits,  recroas  connecting 
on  distributing  frames,  rerunning  jumper  wires,  underlining  switch- 
board jacks,  etc.,  together  with  materials  used  for  such  purposes  which 
do  not  add  to  the  tangible  value  of  such  plant; 

(e)  Recovering  salvage  and  removing  retired  or  abandoned  property; 
(except  subscribers'  station  equipment)  when  such  costs  are  not  pro- 
vided for  by  the  depreciation  reserve. 

Ordinary  repairs  are  not  required  to  be  taken  into  account  in  fixing  a 
rate  of  depreciation. 
Extraordinary  repairs  include: 

(a)  Restoring  to  an  efficient  or  proper  condition  buildings,  structures, 
or  other  units  of  property  which  nave  deteriorated; 

(6)  Substituting,  in  order  to  maintain  normal  efficiency,  new  parts 
for  old  parts  of  continuous  structures,  such  as  pole  lines,  cables,  wires, 
conduits,  etc.,  where  such  substitutions  do  not  amount  to  a  prac- 
tical replacement  of  any  considerable  length  of  such  continuous  struc- 
tures; 

(c)  Restoring  the  condition  of  property  damaged  by  storms,  floods, 
fire,  or  other  casualties; 

(d)  Recovering  salvage  and  removing  retired  or  abandoned  property 
in  connection  with  above  work. 

Extraordinary  repairs  should  be  provided  for  by  adequate  charges  to 
depreciation. 

When  it  is  necessary  substantially  to  reconstruct  or  to  replace  a  major 
portion  of  any  unit  of  property  or  any  important  section  of  a  continuous 
structure,  the  cost  should  be  handled  through  the  capital  accounts;  that 
is,  the  cost  of  the  pro{>erty  removed  or  replaced  should  be  credited  to  the 
appropriate  fixed  capital  accounts  and  the  new  property  should  be 
charged  thereto. 

All  repairs,  whether  ordinary  or  extraordinary*,  should  be  charged  to 
the  appropriate  primary  oi)erating  expense  accounts.  Extraordinary' 
repairs  for  which  a  reserve  has  been  provided  should  then  be  concur- 


I 


rently  charged  to  account  No.  102,  ''Reserve  for  Accrued  Deprecia- 
tion—Cr.,"  and  credited  to  account  No.  611,  ''Repairs  Charged  to  Re- 
serves— Cr." 

22.  Cost  of  repairs.— The  cost  of  repairs,  as  used  in  the  text  of  the 
various  operating  expense  accounts,  should  be  understood  to  include 

•  the  wages,  salaries,  and  fees  paid  employees  directly  engaged  in  the 
work  of  repairs,  personal  expenses  of  such  employees  when  borne  by 
the  company,  and  the  cost  of  materials  and  supplies  consumed  and  the 
expenses  of  facilities  employed  in  making  the  repairs  less  the  value  of 
any  salvage  recovered.  It  includes  also  the  cost  of  direct  supervision, 
such  as  of  foremen  or  superintendents  of  repair  gangs,  but  does  not 
include  the  cost  of  general  supervision  as  provided  for  in  account 
No.  601,  "Suj)ervision  of  Maintenance." 

23.  Depreciation  of  plant  and  equipment.— Telephone  companies 
should  include  in  operating  expenses  depreciation  charges  for  the  pur- 
pose of  creating  proper  and  adequate  reserves  to  cover  the  expenses 
of  depreciation  currently  accruing  in  the  tangible  fixed  capital.  By 
expense  of  depredation  is  meant — 

(a)  The  losses  suffered  through  the  current  lessening  in  value  of 
tangible  property  from  wear  and  tear  (not  coverec^by  current  repairs). 

(6)  0b8r)le8cence  or  inadequacy  resulting  from  age,  physical  change, 
or  supersession  by  reason  of  new  inventions  and  discoveries,  changes 
in  popular  demand,  or  public  requirements,  and 

(c)  Losses  suffered  through  destructipn  of  property  by  extraordinary 
casualties. 

The  amount  charged  as  expense  of  depreciation  should  be  based  upon 
rules  determined  by  the  accounting  company.  Such  rules  may  be 
derived  from  a  consideration  of  the  company's  history  and  experience. 
Companies  should  be  prepared  to  furnish  the  Commission,  upon  de- 
mand, the  rules  and  a  sworn  statement  of  the  facts,  expert  opinions, 
and  estimates  upon  which  they  are  based. 

The  estimate  for  depreciation  of  physical  property  should  take  into 
account — 

(a)  The  gradual  deterioration  and  ultimate  retirement  of  units  of 
property  which  may  be  satisfactorily  individualized,  such  as  build- 
ings, machines,  valuable  instruments,  etc.,  to  the  end  that  by  the 
time  such  units  of  property  go  out  of  service  there  shall  have  been 
accumulated  a  reserve  equal  to  the  original  money  cost  of  such  property 
plus  expenses  incident  to  retirement  less  the  value  of  any  salvage. 

(b)  The  depreciation  accruing  in  property  which  can  not  be  readily 
individualized,  such  as  pole  lines,  wires,  cables,  or  other  continuous 
structures,  where  expenditures  for  repairs  or  replacements  of  indi- 
vidual parts  ordinarily  are  not  actually  made  until  the  later  years  of 
the  life  in  service  of  such  property,  and  when  made  may,  therefore,  be 
classed  as  extraordinary  repairs.  • 

The  rate  of  depreciation  should  be  fixed  so  as  to  distribute,  as  nearly 
as  may  be,  evenly  throughout  the  life  of  the  depreciating  property 
the  burden  of  repairs  and  the  cost  of  capital  consumed  in  operations 
during  a  given  month  or  year,  and  should  be  based  upon  the  average 
life  of  the  units  comprised  in  the  respective  classes  of  property. 


68 


I 


The  amount  estimated  to  cover  the  expense  of  depreciation  of  fixed 
capital  should  be  charged  monthly  to  account  No.  608,  "Deprecia- 
tion of  Plant  and  Equipment "  (or  to  the  appropriate  clearing  account 
or  accounts),  and  concurrently  credited  to  account  No.  102,  "Reserve 
for  Accrued  Depreciation — Cr." 

Account  No.  413,  "Realized  Depreciation  not  Covered  by  Reserves," 
is  provided  in  the  Corporate  Surplus  or  Deficit  account  for  charges 
for  realized  depreciation  on  tangible  fixed  capital  retired  when  such 
depreciation  occurred  prior  to  the  establishment  of  account  No.  102, 
"Reserve  for  Accrued  Depreciation — Cr.,"  or  has  not  been  provided 
for  by  credits  to  that  account. 

24.  Extraordinary  casualties  and  unanticipated  reconstmction. — If  so 
authorized,  upon  application  to  the  Commission,  the  company  granted 
such  authority  may  charge  the  amount  named  in  the  authorization  to  a 
suspense  account  for  the  purpose  of  distributing  over  a  limited  period 
an  extraordinary  loss  of  such  a  nature  that  it  can  not  be  anticipated 
by  the  exercise  of  reasonable  prudence.  Losses  of  this  sort  may  be 
due  to  the  requirement  by  lawful  authority  or  public  necessity  of 
improvements  involving  the  abandonment  of  a  considerable  portion 
of  plant  and  equipment  before  it  has  attained  ita  normal  life  in  service, 
or  to  an  extraordinary  casualty  entirely  unforeseen  and  unprovided 
for.  The  original  cost  of  the  property  so  abandoned  or  destroyed 
should  be  credited  to  the  fixed  capital  accounts  in  which  it  was  carried, 
and  such  portion  of  the  cost  as  may  be  authorized  by  the  Commission 
may  be  charged  to  the  suspense  account,  the  remainder  of  the  cost, 
less  any  salvage,  being  charged  out  as  elsewhere  provided  in  case  of 
retirements  of  property.  The  suspense  account  so  raised  should  be 
credited  and  account  No.  609,  "Extraordinary  Depreciation,"  debited 
monthly  with  such  an  amount  as  will,  through  its  regular  application, 
amortize  the  amount  of  the  loss  at  the  end  of  the  period  designated. 

All  ordinary  casualties  (those  which  occur  with  such  frequency 
that  the  principles  of  insurance  are  applicable  thereto)  should  be 
provided  for  through  an  insurance  reserve  maintained  for  such  losses 
or  be  included  in  the  provision  for  depreciation  of  plant  and  equipment. 

25.  Joint  operating  expenses. — When  any  operating  exf>ense  is  in- 
curred by  the  accounting  company  for  the  joint  benefit  of  itself  and 
others  under  an  agreement  for  apportioning  such  expenses  the  company 
charging  such  expenses  to  others  should  credit  such. amounts  to  its 
primary  expense  accounts  to  which  the  expenses  were  charged  when 
incurred.  The  debtor  company  should  chaige  the  amounts  so  billed 
to  its  primary  expense  accounts.  Bills  rendered  by  the  operating 
company  for  joint  expenses  should  show  the  expenses  in  detail. 

The  amounts  so  handled  through  the  expense  accounts  should  not 
include  any  allowance  for  profit  or  return  upon  the  value  of  the 
property  used;  such  allowance,  if  any,  should  be  credited  by  the 
payee  to  the  appropriate  rent  revenue  account  and  charged  by  the 
payor  to  the  appropriate  rent  deduction  account. 


69 


TEXT  EXPLANATORY  OF  OPERATING  EXPENSE  ACCOUNTS. 


eoi. 


602. 


4 


«03. 


L  MAINTENANCE  EXPENSES. 


[ki 


Supervision  of  Maintenance. 

This  account  should  include  the  pay  and  office  and  traveling 
expenses  of  superintendents  and  their  assistants  when  directly 
in  chai^  of  maintenance  of  telephone  plant,  including  general, 
division,  and  district  plant  superintendents,  engineers,  archi- 
tects, and  their  office  and  field  forces;  the  cost  of  repairing 
drafting  and  engineering  instruments,  and  the  original  cost  of 
such  instruments  as  are  not  properly  chargeable  to  fixed  capital 
accounts;  the  cost  of  office  and  other  supplies  used  by  officers 
and  employees  whose  salaries  are  charged  to  this  account;  jani- 
tor service,  light,  heat,  and  miscellaneous  office  expenses  where 
separate  offices  are  maintained  for  such  employees;  also  that 
portion  of  the  salaries  and  expenses  of  the  general  engineering 
staff  of  the  company  which  is  assignable  to  maintenance. 

Repairs  op  Aerial  Plant. 

This  account  should  include  the  cost  of  repairs  of  all  plant  clas- 
sified as  aerial  plant,  such  as  poles,  towers,  cross  arms,  pins,  brack- 
ets, and  other  pole  fixtures;  braces,  guy  wires,  guy  stubs,  and  other 
pole  supports;  aerial  cables,  and  the  suspension  wires,  bolts, 
clamps,  rings,  hangers,  etc.,  used  to  attach  cables  to  poles,  towers, 
or  other  supports;  aerial  cable  loading  coils,  cable  boxes,  and 
their  appurtenances;  and  aerial  telephone  wires,  drop  wires,  tie 
wires,  insulators,  and  sleeves.  It  includes  also  the  cost  of  trim- 
ming trees  and  clearing  and  removing  obstructions  from  right 
of  way  for  aerial  plant,  other  than  the  cost  of  first  clearing  right 
of  way. 

Repairs  of  Underground  Plant. 

This  account  should  include  the  cost  of  repairs  of  all  plant  clas- 
sified as  underground  plant,  such  as  underground  conduits  and 
their  appurtenances;  underground  cables,  submarine  cables,  and 
the  loading  coils,  towers,  boxes,  and  fittings  belonging  to  such 
cables.  It  also  includes  the  cost  of  repairing  right  of  way  for 
underground  and  submarine  cables,  and  the  cost  of  repaving 
after  repairs  of  underground  conduits. 
604.  Repairs  of  Central  Office  Equipment. 

This  account  should  include  the  cost  of  repairing  telephone 
equipment  in  central  telephone  offices,  such  as  switchboards, 
monitors'  and  supervisors'  desks,  testing  outfits,  main  and  in- 
termediate frames,  cables,  and  jumper  wires,  call  registers  and 
meters,  relay  racks  and  coil  racks;  equipment  for  generating  and 
regulating  power  for  telephone  purposes,  such  as  batteries,  en- 
gines, motors,  generators,  rectifiers,  transformers,  meters,  fuses, 
and  protectors;  telephone  and  telegraph  instruments  and  other 


i^fr 


70 

electrical  instrumente  and  apparatus  in  the  central  office;  equip- 
ment for  operators'  schools  and  rest  rooms,  and  furniture  and 
fixtures  required  for  the  uses  or  convenience  of  the  operating 
forces. 

605.  Repairs  of  Station  Equipment. 

This  account  should  include  the  cost  of  repairing  station  appa- 
ratus, such  as  telephone  sets,  intercommunicating  seto,  bells, 
backboards,  desk  stands,  coin  boxes,  protectors,  battery  boxes, 
batteries,  cords,  and  telephone  and  telegraph  instruments  or 
parts  thereof;  interior  block  wires;  private  branch  exchange 
switchboards,  distributing  frames,  and  switchboard  cables,  and 
booths  and  special  fittings  for  same,  such  as  desks,  chairs,  fans, 
and  cash  registers. 

Note.— The  cost  of  renewals  of  batteries  at  stations  is  not  chargeable  to  this 
account,  but  to  account  No.  628,  "Transmission  Power." 

606.  Repairs  op  Buildings  and  Grounds. 

This  account  should  include  the  cost  of  repairing  general  offices, 
central  offices,  test  stations,  or  other  telephone  offices  and  the  fix- 
tures (except  telephone  apparatus)  therein,  such  as  elevators, 
plumbing,  apparatus  for  heating,  lighting,  ventilating,  and 
power;  and  the  cost  of  maintaining  yards  and  grounds,  with 
their  fences,  sidewalks,  sewers,  etc.,  appurtenant  to  such  build- 
ings. Charge  also  to  this  account  the  cost  of  repairing  shope, 
stores,  stables,  and  garages,  and  permanent  fixtures  therein. 

607.  Station  Removals  and  Changes. 

This  account  should  include  the  cost  of  disconnecting  and 
removing  and  of  changing  the  location  of  all  plant  classified  as 
subscribers'  station  equipment  (as  defined  in  account  No.  230 
"Station  Equipment"),  including  freight  and  cartage  on  such 
equipment  and  material  as  is  sent  to  storehouse. 

(1)  When  stations  are  removed  (not  merely  changed  in  loca- 
tion) from  subscribers'  premises,  the  original  cost  (estimated,  if 
not  known)  of  the  station  should  be  credited  to  the  appropriate 
fixed  capital  accounts,  and  the  cost  of  the  instruments,  private 
branch  exchange  apparatus,  booths,  and  fittings  should  be 
charged  to  account  No.  122,  "Materials  and  Supplies,"  while  the 
cost  of  installation,  including  inside  wires,  or  interior  block  wires 
and  that  portion  of  aerial  wire  which  could  be  used  only  at  the 
subscribers'  premises  from  which  the  station  is  removed,  less 
the  value  of  any  salvage,  should  be  charged  to  this  account. 

Note.— When  extensive  replacements  are  made  of  subscribers'  station  equip- 
ment,  or  of  drop  or  block  wiring  taken  out  of  service  because  of  inadequacy  or 
obsolescence,  as  when  a  magneto  system  Is  changed  to  a  common  battery  or 
when  open  wire  distribution  is  replaced  by  interior  block  construction  the  cost 
of  making  such  replacements  should  be  handled  through  the  regular  construc- 
Uon  and  depreciation  accoimts,  and  should  not  be  Included  In  the  abova 
account. 


< 


•■V 


71 

(2)  If  wiring  left  from  previous  installations  is  reused  either 
on  same  or  other  premises,  the  gain  should  be  credited  to  this 
Account.  This  includes  the  gain  on  inside  wires  and  interior 
block  wires  and  on  that  portion  of  aerial  wire  which  could  be 
used  only  at  subscribers'  premises. 

(3)  When  stations  are  disconnected  but  left  on  premises,  charge 
to  this  account  the  cost  of  disconnecting,  and  when  reconnected, 
the  cost  of  reconnecting, 

(4)  WTien  station  location  or  service  is  changed,  charge  to  this 
account  the  cost  of  such  changes,  less  the  amount,  if  any,  properly 
chargeable  to  fixed  capital  accounts  for  actual  additions  to  plant. 

(5)  Credit  to  this  account  amounts  charged  subscribers  for 
moves  and  changes, 

608,    DEPRECLA.TION    OF   PlANT  AND   EQUIPMENT. 

Charge  to  this  account  monthly  the  amount  estimated  to  be 
necessary  to  cover  the  depreciation  accruing  during  the  month 
in  the  company's  tangible  fixed  capital  (except  depreciation 
provided  in  "Clearing  Accounts,"  Nos.  701,  702,  and  703), 
Amounts  charged  to  this  account  should  be  concurrently  credited 
to  account  No,  102,  "Reserve  for  Accrued  Depreciation— Cr." 
(See  sec,  23,  p.  67.) 

609.  Extraordinary  Depreciation. 

This  account  should  be  charged  monthly  with  such  an  amount 
as  will,  through  its  regular  application,  amortize  any  amount 
that  may  be  carried  in  suspense  on  account  of  extraordinary 
casualties  and  unanticipated  reconstruction,     (See  sec,  24,  p,  68.) 

610.  Other  Maintenance  Expenses. 

This  acc-ount  should  include  cost  of  repairing  telephone  plant 
and  equipment  not  provided  for  elsewhere. 

611.  Repairs  Charged  to  Reserves — Cr. 

Credit  to  this  account  and  charge  concurrently  to  account 
No.  102,  "Reserve  for  Accrued  Depreciation— Cr. , "  an  amount 
equal  to  the  cost  of  extraordinary  repairs  made  for  which  provision 
had  been  made  in  that  reserve;  also,  credit  to  this  account  and 
charge  concurrently  to  the  insurers  or  to  the  insurance  reserve  an 
amount  equal  to  the  cost  of  repairs  made  necessary  by  casualties 
when  such  cost  is  covered  by  insurance  or  an  insurance  reserve. 
(See  sec.  21,  p.  66.) 

H  TEAFFIO  EXPENSES. 

620.  Central  Office  Superintendence. 

This  account  should  include  the  cost  of  all  central  office 
superintendence  as  provided  in  the  following  subaccounts: 
621.   Traffic  Superintendence. 

This  account  should  include  the  pay  and  traveling  expenses 
of  officers  and  their  assistants  when  directly  in  charge  of  traffic, 
either  for  the  company  as  a  whole  or  a  territorial  subdivision; 


■'^SB 


mmmmvM 


■^ 


I. 


t 


72 

«,,  °f  *'  "f  maintained  for  ,uch  employee,.      ^  ^'^*^ 

OJ^.  Service  Inspection. 

ThiB  account  should  include  the  pay  and  expenaea  of  ^r^n 
inspection  forcps    inr^l, .,«;««    n  ;  expenses  of  service 

<W3.  Cfcrwra/  Operating  Wages 

624.  Operators'  Wages. 

This  account  should  include  thA  nax-  f^f  ^u-  t 

625.  Central  Office  Suppues  and  Eipenses. 

rhis  account  should  include  the  cost  of  all  r,nf~l  -.« 
pUes  and  expenses  as  provided  in  th.  M       ■       ^       **  '"^ 

626.  Re^  and  Lunch  Room!  ^  '°"''^"«  ""baccounts: 

resItrS  «r  ce"ntrr  "'  °r  ""^  '^^  -«'^- 

cost  o,  lunchesTridTfr  ctrxtr  c';:^\"'*L^^ 

627.  Operators'  Schooling. 

This  account  should  include  the  expenses  of  .r.,„i„ 
operaton,  (whether  a  school  is  malnXTor  no^    T  ."'" ' 
wages  paid  them  for  which  no  ser^n^^nder^^^hrsiur 

628.   Transmission  Power. 

This  account  should  includp  th«  r^^^*  ^c 
transmitting  traffic  and  fortp^^^'s^LS  Xl^oT^  '" 
^al  and  cental  office  batteries;  andl^cos  0,^ emp  o^:f 
and  supplies  consumed  in  operating  the  gene«Tin^  Z^t    ^ 
storage  batteries  for  transmitthL  cu^nt  or  H  „^^-  ^        *"'* 

629.  Central  Offiu  Stationery  aJZn^  "'*"""«  ''^^■ 

This  account  should  include  the  cost  of  all  postage  stationerv 

630.  Te:Z7er7.^:  ''"'  ''""'"^  '"  ^  °'  cerfoffir  "^'^^ 

This  account  should  include  pay  and  exDensP«  nf  mo-.       '    * 


73 

631.  Miscellaneous  Central  Office  Expenses. 

This  account  should  include  the  cost  of  water,  ice,  fuel,  lights, 
towels,  toilet  supplies,  and  of  janitor  service  and  other  care  of 
central  offices. 

632.  Pay  Station  Expenses. 

This  account  should  include  all  traffic  expenses,  except  com- 
missions and  central  office  operating  expenses,  incurred  in  con- 
nection with  the  operation  of  public  pay  stations. 

633.  Other  Traffic  Expenses. 

This  account  should  include  all  traffic  expenses  not  elsewhere 
provided  for. 

Note.— Rent  paid  for  central  offices  is  chargeable  to  account  No.  331,  "Rent 
Deductions  for  Telephone  Offices,"  and  not  to  this  account. 

m.  OOMMEEOIAL  EXPENSES. 

640.  Commercial  Administration. 

This  account  ehould  include  the  pay  and  expenses  of  officers 
and  their  office  forces  directly  in  charge  of  the  commercial  depart- 
ment, either  for  the  company  as  a  whole  or  for  a  territorial  subdi- 
vision; the  pay  and  expenses  of  employees  when  engaged  in  pre- 
paring contract  orders,  handling  unsolicited  contracts  or  contract 
changes  including  miscellaneous  relations  with  subscribers  and 
patrons  not  specifically  assignable  to  promotion,  collection,  or 
directory  expenses.  Charge  also  to  this  account  the  cost  of 
postage,  printing,  and  stationery;  janitor  service,  light,  heat, 
and  miscellaneous  office  expenses  if  separate  offices  are  main- 
tained for  such  employees. 

Note.— This  account  may  include  the  entire  pay  and  expenses  of  employees 
of  the  commercial  department  who  are  only  incidentally  engaged  in  duties  in 
connection  with  promotion,  collection,  and  directories;  if  .such  employees  are 
MBigned  all  or  part  of  their  time  to  such  duties  their  pay  and  expenses  should 
be  charged  proportionately  to  the  aocount.s  provided  for  such  expenses. 

641.  Promotion  Expenses. 

This  account  should  include  the  pay  and  expenses  of  em- 
ployees and  the  cost  of  demonstrations,  advertising,  and  can- 
vassing designed  to  promote  the  extension  of  the  company's 
business,  as  provided  for  in  the  following  subaccounts: 

642.  Advertising. 

This  account  should  include  salaries  and  expenses  of  the 
advertising  manager,  his  assistants  and  clerks;  cost  of  commer- 
cial advertisements  in  newspapers  or  magazines;  posters,  bulle- 
tins, advertising  sundries,  booklets,  and  all  related  items;  also 
minor  rents  and  cost  of  installing  and  operating  telephones  in 
public  places  wholly  for  demonstration  purposes. 

643.  Canvassing. 

This  account  should  include  expenses  incurred  in  soliciting 
new  business  or  for  changing  or  renewing  existing  service, 
including  the  pav  and  expenses  of  canrassers. 


•fig 


74 


75 


644.  Sublicensee  Relations. 

This  account  should  include  expenses  incurred  in  developing 
the  exchange  of  business  with  sublicensee  companies  and  inde- 
pendent connecting  telephone  companies. 
645.  Collection  Expenses. 

This  account  should  include  the  cost  of  accounting  for  and 
collecting  the  revenues  of  the  company,  as  provided  for  in  the 
following  subaccounts: 

646.  Revenue  Accounting. 

This  account  should  include  the  cost  of  keeping  accounts  with 
subscribers  and  rendering  bills  for  revenue  service,  including  the 
cost  of  postage,  stationery,  and  printing,  and  pay  and  expenses 
of  bookkeepers  and  all  clerks  in  accounting  department  having 
to  do  with  subscribers*  accounts. 

647.  Revenue  Collecting. 

This  account  should  include  the  expenses  of  the  collection 
bureau,  including  postage,  stationery,  and  printing,  collectors' 
salaries  or  commissions,  car  fares,  cost  of  badges,  and  of  deliver- 
ing bills. 

648.  Pay  Station  Commissions. 

This  account  should  include  commissions  allowed  for  handling 
exchange  and  toll  service  messages  from  public  pay  stations. 

649.  Directory  Expenses. 

This  account  should  include  the  cost  of  preparing,  printing, 
and  distributing  directories,  including  the  cost  of  soliciting 
advertisements  for  directories.  (See  account  No.  132,  "Prepaid 
Directory  Expense.") 

650.  Other  Commercial  Expenses. 

This  account  should  include  all  commercial  expenses  not  pro- 
vided for  elsewhere. 

IV.  GENEEAL  AKD  MISCELLANEOUS  EXPENSES. 

660.  General  Office  Salaries. 

This  account  should  include  the  matters  provided  for  in  the 
following  subaccounts: 

661.  Salaries  of  General  Officers. 

This  account  should  include  the  salaries  of  the  chairman  of 
the  board,  president,  vice  president,  secretary,  treasurer,  comp- 
troller, general  auditor,  general  manager,  general  superintend- 
ent, and  all  other  officers  whose  jurisdiction  extends  to  the 
operations  of  the  company  as  a  whole. 

662.  Salaries  of  General  Office  Clerks. 

This  account  should  include  the  salaries  and  wages  of  book- 
keepers,  paymasters,  cashiers,  sten(^rapher8,  and  all  other 
clerks  employed  in  the  general  office,  except  those  engaged  in 
revenue  accounting  and  collecting. 


( 


•^»v 


663.  General  Office  Supplies  and  Expenses. 

This  account  should  include  the  matters  provided  for  in  the 
following  subaccounts: 

664.  Expenses  of  General  Officers  and  Clerks. 

This  account  should  include  the  traveling  and  incidental  ex- 
penses of  general  officers  and  other  general  office  employees. 

665.  General  Office  Stationery  and  Printing. 

This  account  should  include  the  cost  of  all  postage,  station- 
ery, stationery  supplies,  and  printing  for  use  in  general  offices, 
except  that  used  in  revenue  accounting  and  collecting. 

666.  Other  General  Office  Supplies  and  Expenses. 

This  account  should  include  the  cost  of  office  supplies  (other 
than  postage,  stationery,  and  printing),  repairs  of  office  furni- 
ture and  replacements  of  such  furniture  as  has  not  been  capi- 
talized; cost  of  telegrams  and  of  any  special  telephone  service; 
wages  of  janitors,  jwrters,  and  messengers;  and  other  miscel- 
laneous expenses  of  general  offices. 

Note.— Rents  of  general  offices  (less  such  estimated  cost,  if  any,  as  Ls  included 
to  cover  the  exi>ense  of  fumishinR,  heatine,  and  lighting  them  by  the  lessor) 
should  be  charged  to  account  No.  331,  "Rent  Deductions  for  Telephone 
OflQces." 

667.  General  Law  Expenses. 

This  account  should  include  all  law  expenses  (except  those  in- 
curred in  the  defense  and  settlement  of  damage  claims), including 
pay  and  expenses  of  all  counsel,  solicitors,  and  attorneys,  their 
clerks  and  attendants,  janitor  service,  light,  heat,  and  other  ex- 
penses of  their  offices;  cost  of  law  books,  printing  briefs,  legal 
forms,  testimony,  reports,  etc.;  fees  and  retainers  for  services  of 
attorneys  not  regular  employees;  court  costs  and  payments  of 
special,  notarial,  and  witness  fees  not  provided  for  elsewhere; 
expenses  connected  with  taking  depositions;  and  all  law  and 
court  expenses  not  provided  for  elsewhere. 

Note.— The  compensation  of  the  general  solicitor  or  counsel  or  other  attor- 
neys engaged  partly  in  the  defense  or  settlement  of  damage  suits  and  partly 
In  other  legal  work  should  be  properly  apportioned  between  this  account  and 
account  No.  070,  "Law  Expenses  Connected  with  Damages." 

668.  Insurance. 

This  account  should  include  premiums  paid  to  insurance 
companies  for  fire,  fidelity,  boiler,  casualty,  burglar,  and  all 
other  insurance.  Charge  also  to  this  account  and  credit  account 
No.  169,  "Insurance  and  Casualty  Reserves,"  amounts  set  aside 
as  an  insurance  reserve. 

This  account  should  be  credited  and  the  proper  fixed  capital 
account  or  account^  concurrently  charged  with  the  cost  of  insur- 
ance applicable  to  construction  work. 

NoTK.— In  annual  reports  to  the  Commission  the  company  will  be  required 
to  report  the  charges  made  to  this  account  for  the  various  kinds  of  insur* 
Mice,  and  for  self-instvance. 


76 


77 


669.  Accidents  and  Damages. 

This  account  should  include  all  expenses  (other  than  law 
expenses)  incurred  on  account  of  persons  killed  or  injured  and 
on  account  of  property  of  others  damaged  when  such  expenses 
have  not  been  provided  for  by  insurance  or  by  a  reserve.  It 
includes  the  pay  and  expenses  of  claim  agents,  investigators, 
and  adjusters;  wages  paid  employees  if  absent  on  account  of 
injury;  fees  and  expenses  of  surgeons  and  doctors;  nursing, 
hospital  attendance,  medical  and  surgical  supplies,  fees  and 
expenses  of  coroners  and  undertakers,  and  contributions  to 
hospitals;  also  amounts  paid  in  settlement  of  personal  injury  or 
damage  claims. 

This  account  should  be  credited  and  the  proper  subdivisions 
of  fixed  capital  accounts  concurrently  charged  with  the  expenses 
of  accidents  and  damages  incident  to  construction  work. 

670.  Law  Expenses  Connected  wfth  Damages. 

This  account  should  include  all  law  expenses  connected  with 
the  defense  or  settlement  of  damage  claims,  including  a  proper 
proportion  of  the  salaries  and  expenses  of  the  general  solicitor  or 
counsel,  and  salaries,  fees,  and  expenses  of  attorneys  engaged 
in  this  work;  fees  of  court  stenographers  and  other  court  expenses; 
the  cost  of  law  books,  printing  briefs,  court  records,  and  similar 
papers  in  connection  with  such  cases. 

This  account  should  be  credited  and  the  proper  subdivisions 
of  fixed  capital  accounts  concurrently  charged  with  law  expenses 
incident  to  damage  claims  arising  out  of  construction  work. 

671.  Miscellaneous  General  Expenses, 

This  account  should  include  the  matters  provided  for  in  the 
following  subaccounts: 

672.  Relief  Department  and  Pensions. 

This  accoimt  should  include  pensions  or  other  benefits  paid 
to  employees  or  representatives  of  former  employees  and  ex- 
penses in  connection  therewith;  salaries  and  expenses  incurred 
in  conducting  a  relief  department,  and  contributions  made  to 
such  department. 

673.  Telephone  Franchise  Requirements. 

This  account  should  include  the  cost  of  all  service  jmd  materi- 
als and  supplies  furnished  to  municipal  corporations  in  compli- 
ance with  franchise  requirements  and  for  which  no  payment  is  re- 
ceived by  the  company:  also  of  all  direct  expense,  such  as  paving 
and  other  like  matters,  incurred  in  compliance  with  such  require- 
ments and  for  which  no  reimbursement  is  received  by  the  com- 
pany. This  does  not  include  such  expense  incurred  in  con- 
nection with  construction  or  repairs, 'which  should  be  charged 
to  fixed  capital  or  maintenance  accounts.  Amounts  charged  to 
this  account  for  which  there  is  no  direct  money  outlay  should  be 
credited  to  account  No.  676,  "Telephone  Franchise  Require- 
ments— Cr." 


4 


^■V 


674.  Amortization  of  Francises  and  Patents. 

This  account  should  include  each  month  the  amount  neces- 
sary to  cover  such  portions  of  the  life  of  limited  franchises  and 
patents  as  has  expired  or  been  consumed  during  the  month. 
The  amount  so  charged  should  be  concurrently  credited  to 
account  No.  103,  "Reserve  for  Amortization  of  Intangible  Cap- 
ital—Cr." 

Note.— The  amount  charged  U>  this  account  should  be  based  upon  a  rule 
determined  by  the  accounting  company,  the  purpose  and  effect  of  such  rule 
being  to  accumulate  by  charges  equitably  distributed  throughout  the  life 
of  any  franchise  or  patent,  a  reserve  that  will,  at  the  expiration  of  its  life,  equal 
the  original  cost. 

675.  Other  General  Expenses. 

This  account  should  include  such  incidental  general  expenses 
as  are  not  provided  for  in  the  foregoing  accounts,  such  as  cost 
of  publishing  notices  of  stockholders'  meetings,  of  election  of 
directors,  annual  reports  in  newspapers,  and  of  dividends  de- 
clared, and  fees  and  expenses  paid  to  directors,  expenses  of 
transfer  agents,  and  listing  of  stocks  on  exchange. 

676.  Telephone  Fran<^ise  Requirements— Cr. 

This  account  should  include  the  amounts  included  in  account 
No.  673,  "Telephone  Franchise  Requirements,"  for  which  there 
is  no  actual  money  outlay. 

OLEAEIKG  AOOOUKTS. 

[Required  of  Class  A  and  Class  B  Companies.] 

The  following  accounts  are  provided  for  certain  expenses  which 
usually  affect  several  classes  of  operations  but  need  to  be  brought 
together  in  one  account  in  order  that  the  total  of  the  expenses  may 
be  known  and  properly  distributed. 
701.  Shop  Expense. 

This  accoimt  or  appropriate  subaccounts  should  be  arranged 
80  as  to  record  separately  the  expenses  of  the  general  shops  as 
follows:  (1)  Salaries  and  wages  of  shop  employees;  (2)  personal 
and  incidental  expenses  of  such  employees;  (3)  materials  and 
supplies  for  general  shop  use;  (4)  repairs  of  shop  tools  and 
machinery;  (5)  rent  paid  for  shop  buildings;  (6)  depreciation 
of  shop  tools,  machinery,  and  appliances. 

The  shop  expense  account  should  be  cleared  by  apportioning 
the  total  amount  of  the  expenses  to  the  various  jobs  on  an  equi- 
table basis. 
?02.  Stable  and  Garage  Expense. 

«  This  account  or  appropriate  subaccounts  should  be  arranged 

so  as  to  record  separately  the  expenses  of  stables  and  garages  as 
follows:  (1)  Salaries  and  wages  of  drivers,  chauffeurs,  stable- 
men, garagemen,  and  other  employees  in  stables  and  garages; 


78 


(2)  personal  and  incidental  expenses  of  such  employees;  (3) 
materials  and  supplies,  including  fuel  and  gasoline,  hamesB, 
tires,  and  other  supplies  for  stables  and  garages;  (4)  repairs  of 
automobiles  and  other  vehicles  and  harness;  (5)  rent  paid  for 
buildings,  horses  and  vehicles;  (6)  depreciation  on  vehicles, 
horses,  harness,  etc.,  including  losses  unprovided  for  by  reserves 
or  insurance. 

Credit  to  this  account  any  charges  for  service  performed  for 
others. 

A  record  should  be  kept  of  the  iise  of  teams  and  automobiles, 
and  the  total  expense  should  be  apportioned  to  the  proper 
accounts  according  to  use,  or  the  debits  to  the  expense  ac- 
counts may  be  made  at  rates  per  hour  of  service  which  have 
been  found  to  be  fair  and  to  distribute  the  total  expense 
equitably. 
703.  Tool  Expense. 

Charge  to  this  account  all  expense  for  tools  (except  shop  tools 
and  tools  carried  as  supplies  unissued).  It  includes  (1)  the  cost 
of  small  hand  tools  of  which  no  account  is  kept  after  issue;  (2)  the 
cost  of  repairing  tools;  (3)  the  cost  of  tools  lost  or  stolen;  (4)  de- 
preciation on  tools  taken  out  of  service  because  of  breakage  or 
other  deterioration. 

This  account  should  be  cleared  by  adding  to  the  expense  of 
repairs  and  cost  of  plant  installed  such  amounts  as  will  equitably 
distribute  the  total  expense  for  tools. 
7'H.  Supply  Expense. 

Charge  to  this  account  or  to  appropriate  subaccounts  all  ex- 
penses (except  insurance  and  taxes)  incurred  directly  in  con- 
nection with  the  purchase,  storage,  handling,  and  distribution 
of  materials  and  supplies  and  stationery.  It  includes  (1)  the 
pay  and  expenses  of  purchasing  agents,  mani^ers  of  stores,  clerks, 
and  laborers;  (2)  rents  paid  for  stores;  (3)  cost  of  lighting  and 
heating;  (4)  undistributed  transportation  charges;  (5)  discounts 
recovered  through  prompt  payment  of  bills  for  materials  and 
supplies  when  such  discounts  can  not  be  assigned  to  the  particu- 
lar bills;  (6)  oven^es  or  shortages  in  the  uLiterials  and  supplies 
account  disclosed  by  inventories  which  can  not  be  assigned  to 
specific  accounts;  and  (7)  the  estimated  depreciation  on  mate- 
rials and  supplies  due  to  breakage,  leakage,  shortage,  and  wear 
and  tear. 

This  account  should  be  cleared  by  adding  to  the  cost  of  ma- 
terials and  supplies  passing  through  stores  a  suitable  loading 
charge  which  will  equitably  distribute  the  total  cost  of  conduct- 
ing the  stores  and  by  adding  to  the  cost  of  such  supplies  as  are 
bought  by  the  purchasing  department  a  pro  rata  share  of  the  total 
expense  for  the  purchasing  department. 


•^ 


4 


^ 

> 


79 

705.  Engineering  Expense. 

Charge  to  this  account  or  to  appropriate  subaccounts  all  ex- 
penses for  engineering  so  as  to  show  separately  the  following: 
(1)  Salaries  and  wages;  (2)  personal  and  incidental  expenses  of 
engineering  department  employees;  (3)  rent  paid  for  office  and 
(4)  office  ex])enses. 

This  account  should  be  cleared  by  apportioning  the  total 
expenses  to  operating  expenses  and  fixed  capital  accounts  on 
the  basis  of  service  rendered,  as  determined  by  the  actual  time 
devoted  to  particular  jobs  or  on  an  equitable  basis  fixed  by  the 
officers  of  the  company. 
706.  Plant  SupervisiojJ  Expense. 

Charge  to  this  account  the  cost  of  general  supervision  of  the 
maintenance  and  construction  of  the  plant  where  a  separate 
department  of  the  company's  organization  is  charged  with  such 
supervision.  It  includes  the  pay  and  expenses  of  the  plant 
supervising  officers,  such  as  the  general  plant  superintendent, 
district  plant  superintendent,  plant  engineers  and  their  office 
a^d  field  forces,  charged  with  planning  for  and  superintending 
the  work  of  maintenance  and  plant  construction. 

This  account  or  appropriate  subaccounts  should  be  so  arranged 
as  to  show  in  detail  the  expenses  of  the  plant  supervision  depart- 
ment as  follows:  (1)  Salaries  and  wages;  (2)  personal  and  inci- 
dental expenses  of  employees;  (3)  rent  paid  for  offices;  and  (4) 
office  expenses. 

This  account  should  be  cleared  by  charging  directly  to  the 
appropriate  accounts  such  expenses  as  can  be  allocated  to  par- 
ticular pieces  of  work  and  by  charging  out  the  balance  on  the 
basis  of  labor  employed  in  all  construction  or  maintenance 
work  in  progress. 

v^^:"?*^®  ^-^'  °'  ^"^^^  foremen  and  foremen  in  direct  charge  of  jobs 
should  be  included  in  the  cost  of  the  job  and  not  charged  to  this  account. 

707.  House  Service  Expense. 

This  account  should  include  the  expenses  pertaining  to  the 
operation  of  offices  and  buildings,  whether  owned  or  rented  by 
the  company,  when  such  expenses  can  not  be  allocated  as  they 
accrue  to  the  operating  expense  accounts  and  other  accounts 
This  account  includes  fuel,  heat,  light,  power,  elevator  service, 
janitor  service,  and  like  expenses,  but  does  not  include  rents,  • 
insurance,  taxes,  and  maintenance  expenses. 

This  account  should  be  cleared  by  apportioning  the  entire 
expense  to  the  operating  expenses  and  other  accounts  on  basis 
of  the  use  made  of  such  property. 

o 


SUPPLE]MENT  TO  FIRST  ISSUE 


OF  THE 


UNIFORM  SYSTEM  OF  ACCOUNTS 


FOB 


TELEPHONE  COMPANIES 


CLASS  A  AND  CLASS  B 


AS  PRESCRIBED  BY  THE 


INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGDLATE  COMMERCE 


Effectiye  on  January  1, 1915 


< 


WASHINGTON 

GOVKRNMENT  PRINTING  OFFICE 

1»14 


SCHOOL  CF   U'J  ''"'rtitS- 
OOLUMaiA  UNIVc^SITY 


THE  INTERSTATE  COMMERCE  COMMISSION. 


James  S.  Harlan,  of  lUijiois, 
JxjDsoN  C.  Clements,  of  Georgia. 
Edoab  E.  Clark,  of  I(ywa, 
Charles  C.  McChord,  of  Kentucky, 
Balthasar  H.  Meyer,  of  Wiscormn, 
Henry  C.  Hall,  of  Colorado. 
WiNTHROP  M.  Daniels,  of  New  Jersey. 

George  B.  McGinty,  Secretary, 
(2) 


y 


%' 


< 


ORDER. 

At  a  General  Session  of  the  INTERSTATE  COMMERCE 
COMMISSION,  held  at  its  office  in  Washington,  D.  C, 
on  the  22d  day  of  December,  1914. 

The  subject  of  a  Uniform  System  of  Accounts  to  be 
prescribed  for  and  kept  by  telephone  companies  being 
under  consideration,  the  following  order  was  entered; 

It  is  ordered,  That  the  Supplement  to  the  First  Issue 
of  the  Uniform  System  of  Accounts  for  Telephone  Com- 
panies, Class  A  and  Class  B,  with  the  text  pertaining 
thereto,  a  copy  of  which  is  now  before  this  Commission, 
be,  and  the  same  is  hereby,  approved ;  that  a  copy  thereof, 
duly  authenticated  by  the  Secretary  of  the  Commission 
be  filed  in  its  archives,  and  a  second  copy  thereof,  in  like 
manner  authenticated,  in  the  office  of  the  Division  of 
Carriers'  Accoimts;  and  that  each  of  said  copies  so 
authenticated  and  filed  shall  be  deemed  an  original 
record  thereof. 

It  is  further  ordered,  That  the  said  Supplement,  with 
the  text  pertaining  thereto,  be,  and  the  same  is  hereby,, 
prescribed  for  the  use  of  Class  A  and  Class, B  telephone 
companies  (those  having  annual  operating  revenues 
exceeding  $50,000),  subject  to  the  provisions  of  the  Act 
to  Regulate  Commerce  as  amended;  and  that  a  copy  of 
the  said  Supplement  be  sent  to  each  and  every  such 
carrier  and  to  each  and  every  receiver  or  operating 
trustee  of  any  such  carrier. 

It  is  further  ordered,  That  January  1,  1915,  be,  and  is 
hereby,  fixed  as  the  date  on  which  the  said  Supplement 
shall  become  effective. 


By  the  Commission : 
[seal.] 


73556*-14 


George  B.  McGinty, 

Secretary. 
(8) 


INTRODUCTORY  LETTER. 


Interstate  Commerce  Commission, 

Division  of  Carriers'  Accounts, 

Washington,  December  22,  1914' 

To  Class  A  and  Class  B  Telephone  Companies: 

The  Uniform  System  of  Accounts  for  Telephone  Com- 
panies, Class  A  and  Class  B,  became  effective  on  January 
1,  1913. 

It  is  found  advisable  to  add  an  additional  balance- 
sheet  account  to  take  care  of  deferred  credit  items  not 
covered  by  accounts  Nos.  1 68, 1 69,  and  1 70.  Account  No. 
170a,  ^' Other  deferred  credit  items,"  is  added  to  cover 
suspense  account  credit  balances  that  are  not  provided 
for  elsewhere. 

With  this  exception,  no  changes  have  been  made  in 
the  Uniform  System  of  Accounts  for  Telephone  Compa- 
nies, Class  A  and  Class  B. 

Fred  W.  Sweney, 
Chief  Examiner  of  Accounts, 

(6) 


y     < 


SUPPLEMENT  TO  THE  FIRST  ISSUE  OF  THE  UNIFORM 
SYSTEM  OF  ACCOUNTS  FOR  TELEPHONE  COMPANIES, 
CLASS  A  AND  CLASS  B. 


/ 


( 


BALANCE-SHEET  ACCOUNTS. 

Add  the  following  to  the  text  explanatory  of  balance-sheet  accounts 
on  page  29: 

170a.  Other  Deferred  Credit  Items. 

This  account  shall  include  suspense  account  credit  balances 
that  can  not  be  entirely  cleared  and  disposed  of  until  additional 
information  is  received,  and  other  items  of  the  nature  of  deferred 
credite  not  provided  for  elsewhere.  It  should  include  such  mat- 
ters 88  credit  balances  in  clearing  accounts,  items  awaiting 
adjustment  between  accounts,  amounts  to  be  spread  over  a 
stated  period  not  provided  for  elsewhere,  and  similar  items. 

(7) 
O 


y 


INTERSTATE  COMMERCE  COMMISSION 


RULES 


GOVERNING  THE 


CLASSIFICATION 
OF  TELEPHONE  EMPLOYEES 


EFFECTIVE  AS  QF  JULY  1,  1917 


WashtnCToi^ 
government  printing  officb 

1917 

eOtlOOL  OF  BUSINESS 


COLUMBIA  UNIVERSITY 


INTERSTATE  COMMERCE  COMMISSION 


RULES 


GOVERNING  THE 


CLASSIFICATION 
OF  TELEPHONE  EMPLOYEES 


i 


EFFECTIVE  AS  OF  JULY  1,  1917 


>   T    < 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1917 


/. 


MMHMMl 


THE  INTERSTATE  COMMERCE  COMMISSION. 


Henry  C.  Hall. 
Edgar  E.  Clark. 
Ja^ies  S.  Harlan. 
Charles  C.  McChord. 
Balthasar  H.  Meyer. 
WiNTHROP  M.  Daniels. 

George  B.  McGintt,  Secretary, 

(2) 


ORDER. 

At  a  General  Session  of  the  INTERSTATE  COMMERCE 
COMMISSION,  held  at  its  office  in  Washington,  D.  C, 
on  the  13th  day  of  July,  A  D.  1917. 

Ordered,  That  the  rules  entitled  "  Rules  governing  the  classifica- 
tion of  telephone  employees''  be  approved,  effective  as  of  July  1, 
1917,  and  that  all  telephone  companies  within  the  scope  of  section  20 
of  the  Act  to  Regulate  Commerce  as  amended  be  governed  by  the 
said  rules  in  the  preparation  and  submission  of  their  annual  reports 
to  the  Interstate  Commerce  Commission. 

By  the  Commission. 

[seal.]  George  B.  McGinty, 

Secretary, 

104475°— 17 


RULES  GOVERNING  THE  CLASSIHCATION  OF  TELEPHONE  EMPLOYEES. 


Effective  as  of  July  1,  1911. 


1.  Befliiition  of  employees. — For  the  purpose  of  statistical  count 
and  classification  the  word  employees^  as  used  herein,  is  intended 
to  include  all  pei*sons  in  the  serv^ice  of  the  reporting  telephone 
company  subject  to  its  continuing  authority  to  supervise  and  direct 
the  manner  of  rendition  of  their  service,  regardless  of  the  fact 
that  certain  of  such  persons  may  be  devoting  part  time  only  to  the 
service  of  the  company;  may  be  employed  for  temporary  periods; 
or  may  be  absent  temporarily  on  leave  (e.  g.,  vacation)  or  on  account 
of  disability  due  to  accident  or  sickness.  It  is  intended  to  exclude 
persons  engaged  to  render  only  specifically  defined  service  and  not 
subject  to  the  continuing  authority  of  the  company  to  supervise  nnd 
control  their  acts,  such  as  independent  contractors  performing  specific 
work  or  services  for  the  company  but  not  under  its  direct  control 
and  management;  also  persons  who  receive  only  a  royalty  or  re- 
tainer from  the  company;  pensioners  not  required  to  render  service; 
persons  absent  on  definitely  granted  leave  without  pay  and  not  sub- 
ject to  call  for  duty ;  and  persons  temporarily  laid  olf  from  service. 
Persons  on  vacation,  whether  with  or  without  pay,  should  be  con- 
sidered employees  if  subject  to  call  for  duty. 

2.  Counting  employees. — Section  20  of  the  Act  to  Regulate  Com- 
merce requires  that  telephone  companies  in  their  annual  reports  to 
the  Interstate  Commerce  Commission  shall  state  "  the  number  of  em- 
ployees and  the  salaries  paid  each  class."  The  number  of  employees 
being  likely  to  fluctuate,  telephone  companies  ai-e  required  to  classify 
and  count  their  employees,  male  and  female  separately,  at  two  dif- 
ferent times  each  year;  viz,  as  of  the  end  of  each  of  the  months  of 
June  and  December.  The  last  day  of  the  month  shall  be  considered 
the  end  of  the  month,  except  when  it  falls  on  a  Sunday  or  a  holiday, 
in  which  case  the  count  shall  be  made  as  of  the  last  preceding  business 
day.  Every  person  sustaining  to  the  telephone  company  the  rela- 
tion of  employee,  as  defined  in  section  1  above,  shall  be  included  in 
the  count. 

(5) 


II ii'ih    ■■ain'Miin 


iiitm^m 


Mi 


3.  Joint  employees.— Eacli  person  (except  as  pro\'ide(l  in  the 
next  succeeding  paragraph)  concurrently  engaged  under  a  joint  ar- 
rangement in  the  service  of  two  or  more  telephone  companies,  shall 
l)e  considered  a  joint  employee  and  shall  be  counted  by  each  tele- 
phone company  involved  in  such  joint  service  arrangement  and  rep- 
resented in  its  return  of  the  number  of  employees  by  a  fraction  based 
on  the  number  of  telephone  companies  served.  For  example,  if  such 
an  employee  is  in  the  service  of  three  telephone  companies,  each  such 
company  shall  report  him  under  the  number  of  employees  as  one- 
third  of  an  employee.  If,  however,  the  entire  compensation  of  an 
employee  concurrently  engaged  in  the  service  of  two  or  more  tele- 
phone companies  is  borne  by  a  single  telephone  company,  he  shall, 
for  the  purpose  of  these  returns,  be  treated  as  an  employee  of  that 
company  and  not  as  a  ''  joint "  employee. 

A  person  employed  by  and  serving  two  or  more  telephone  com- 
panies in  the  capacity  of  a  general  officer  but  acting  independently 
for  each  company  shall  be  counted  and  reported  as  one  employee 
by  each  company.  The  term  '^general  officer"  as  here  used  means 
an  officer  serving  a  company  in  such  a  capacity  as  that  of  president, 
vice  president,  secretaiy,  treasurer,  general  counsel,  general  solicitor, 
controller,  general  auditor,  general  manager,  or  chief  engineer. 

4.  Classiftcatioii  of  employees  with  respect  to  character  of 
service.— Employees  shall  be  classified  with  resi^ect  to  character  of 
service  rendered  in  accordance  with  the  definitions  of  classes  given 
below.  Where  an  employee's  duties  are  such  as  to  make  him  includ- 
able in  two  or  more  classes  he  shall  be  (Counted  under  that  classifica- 
tion indicated  by  the  preponderating  character  of  his  work,  and  the 
return  of  his  rate  of  compensation  shall  be  assigned  to  the  same 
classification. 

1.  CxEXERAL  OFFICERS  AND  ASSISTANTS. 

Include  under  this  head  employees  engaged  in  the  general  super- 
vision of  the  affairs  of  a  company  as  a  whole,  together  with  their 
special  staff  assistants,  and  those  engaged  in  the  supervision  of  a 
general  department  of  a  company,  such  as  president,  assistants  to 
president,  vice  presidents,  assistants  to  vice  presidents,  secretary,  as- 
sistant secretaries,  treasurer,  assistant  treasurers,  general  counsel, 
general  solicitor,  controller,  general  auditor,  general  manager,  or 
chief  engineer. 

2.  OPERATING  OFFICIALS  AND  ASSISTANTS. 

Include  under  this  head  employees  engaged  in,  and  responsible 
for,  the  administration  of  an  entire  operating  department  of  a  com- 
pany or  a  division  or  district  thereof,  and  those  engaged  either  in 
the  supervision  of  certain  phases  of  the  work  of  an  operating  unit 
or  in  staff  or  research  work  incidental  thereto,  such  as  general,  di- 


vision, and  district  commercial,  plant  and  traffic  superintendents, 
superintendents  of  construction,  maintenance,  and  buildings  and 
supplies,  purchasing  agents,  supervisors  of  directories,  and  advertis- 
ing managers. 

Note.— The  general  manager  shall  be  included  in  Group  1. 

3.  ATTORNEYS  AND  RIGHT-OF-WAY  AGENTS. 

Include  under  this  head  employees  regularly  engaged  in  legal 
work  on  behalf  of  the  company,  those  engaged  in  negotiations  with 
official  public  bodies  and  individual  or  corporate  property  owners 
for  the  purpose  of  securing  right-of-way  privileges,  tax  attorneys, 
tax  agents,  etc. 

Note.— The  administrative  bead  of  tlie  legal  department  shall  be  included  in 
llroup  1. 

4.  ENGINEERS. 

Include  under  this  head  employees  engaged  in  the  supervision  of 
the  engineering  work  of  a  departmental  or  territorial  unit,  and  those 
who  direct  surveys  or  field  work,  prepare  designs,  plans,  estimates  or 
specifications,  or  make  technical  studies  and  investigations  in  con- 
nection with  the  development,  construction,  modification,  mainte- 
nance, or  operation  of  telephone  plant ;  such  as  engineers  of  outside 
])lant,  engineers  of  inside  plant,  traffic  engineers,  building  engineers, 
appraisal  engineers,  power  and  light  engineers,  fundamental  plan 
engineers,  division  plant  engineers,  and  district  plant  engineers. 

XoTE.— The  administrative  head  of  the  eujrineerinjj  department  shall  be  in- 
cluded in  Group  1. 

.5.  DRAFTSMEN,  SURVEYORS,  AND  STUDENT  ENGINEERS. 

Include  under  this  head  employees  engaged,  in  field  or  office,  in 
elementary  technical  work  in  connection  with  the  development,  con- 
struction, modification,  maintenance,  or  operation  of  telephone  plant, 
such  as  chief  draftsmen,  draftsmen,  fieldmen,  surveyors,  rodmen, 
chainmen,  and  student  engineers. 
G.  ACCOUNTANTS. 

Include  under  this  head  employees  engaged  in  directing  the  dis- 
bursement or  revenue  accounting  of  an  entire  company  or  at  an  ac- 
counting center,  and  those  engaged  in  directing  or  making  audits  or 
in  special  staff  or  research  work  in  telephone  accounting  and  statis- 
tics, such  as  auditors  of  disbursements,  auditors  of  receipts,  division 
auditors  of  receipts,  division  revenue  supervisors,  disbursement  super- 
visors, chief  traveling  auditor,  traveling  auditors,  statisticians,  and 
other  special  accountants. 

Note  A.— The  administrative  head  of  the  accounting  department  shall  be  in- 
clude<l  in  Group  1. 

Note  B. — Employees  whose  duties  are  primarily  those  of  a  bookkeeper  or 
clerk  shall  be  Included  in  Group  7. 


8 

7.  CLERICAL  EMPLOYEES. 

Include  under  this  head  employees  engaged  in  or  supervising  gen- 
eral or  specialized  office  work  (other  than  that  performed  by  em- 
ployees incidentally  to  their  principal  duties  as  indicated  by  the 
other  groups  herein  established),  such  as  cashiers,  paymasters,  book- 
keepers, chief  clerks,  clerks,  clerical  students,  stenographers,  typists, 
messengers,  and  office  boys,  etc. 

Note.— Helpers,  apprentices.  .Innior  workmen,  and  other  students  undergoing 
specific  training;,  sliould  be  classifie<I  in  accordanc-e  with  the  character  of  the 
worlj  for  which  they  are  being  trained. 

S.  LOCAL  MAXAGEES. 

Include  under  this  head  employees  engaged  in  the  supervision  of, 
and  responsible  for,  either  the  commercial  or  the  entire  work  in  the 
territory  covered  by  a  local  office,  such  as  managers,  commercial 
managers,  and  nonfunctional  or  combination  managers. 

9.  COMMERCIAL  AGENTS. 

Include  under  this  head  employees  engaged  in  soliciting,  outside 
collections,  and  other  commercial  work  of  a  similar  character  usually 
performed  outside  of  the  company's  offices,  such  as  chief  commercial 
agents,  commercial  agents,  chief  contract  agents,  contract  agents, 
soliciting  agents,  directory  advertising  agents,  chief  collectors,  out- 
side collectors,  and  adjusters. 

10.  EXPERIENCED  SWITCHBOARD  OPERATORS. 

Include  under  this  head  all  experienced  employees  engaged  in  oper- 
ating or  supervising  the  operation  of  switchboards  or  similar 
auxihary  apparatus,  and  those  in  immediate  charge  of  the  training 
school  for  operators  or  engaged  in  giving  instructions  to  students  in 
operating  methods,  practices,  and  rules,  such  as  chief  operators, 
supervisors,  operators,  public  telephone  attendants,  private  branch 
exchange  operators,  chief  instructoi*s,  and  instructors. 

11.  OPERATORS  IN  TRAINING. 
Include  under  this  head  all  employees  who  are  taking  the  school 

course  for  operators,  also  all  operating-room  emplovees  engaged  in 
operating  switchboard  or  similar  auxiliary  apparatus,  but  who  are 
not  classed  as  experienced  operatoi-s. 

12.  SERVICE  INSPECTORS. 
Include  under  this  head  employees  engaged  in  investigating  and 

adjusting  service  criticisms  and  in  making  special  service  tests  and 
inspections  at  subscribers'  premises  and  at  central  offices,  and  those 
engaged  in  making  and  recording  routine  detailed  service  observa- 
tions,  such  as  traffic  inspectors  and  service  observers. 


> 


i 


13.  SUPERVISING  FOREMEN. 

Include  under  this  head  employees  who  have  immediate  charge  of 
unit  or  gang  foremen  engaged  in  the  construction,  installation,  modi- 
fication, or  maintenance  of  telephone  plant,  such  as  general  foremen, 
chief  equipment  foremen,  chief  installation  foremen,  chief  line  fore- 
men, chief  foremen  of  cablemen,  chief  foremen  of  cable  splicers,  and 
chief  foremen  of  subway  construction. 

14.  CENTRAL    OFFICE    INSTALLATION    AND    MAINTE- 

NANCE MEN. 

Include  under  this  head  employees  engaged  in  installing  or  direct- 
ing installations  of  central  office  equipment,  those  engaged  at  cen- 
tral offices  in  making  tests  of  plant  and  equipment  or  in  the  main- 
tenance of  central  office  equipment,  or  in  immediate  charge  of  such 
test  and  maintenance  forces,  and  those  engaged  in  inspecting  central 
office  equipment;  such  as  central  office  installation  foremen,  central 
office  installers,  wire  chiefs,  test  board  men,  equipment  men,  auto- 
matic and  semiautomatic  switchmen,  central  office  repairmen,  and 
central  office  inspectors. 

15.  LINE  AND  STATION  CONSTRUCTION,  INSTALLATION, 

AND  MAINTENA^^CE  MEN. 

Include  under  this  head  employees  engaged  in  the  construction, 
modification,  and  maintenance  of  aerial  plant,  including  those  in 
immediate  charge  of  this  work  and  those  engaged  in  its  inspection, 
those  engaged  in  installing  station  or  private  branch  exchange  equip- 
ment or  in  immediate  charge  of  this  work,  and  those  engaged  in  re- 
pairing station  and  private  branch  exchange  equipment  and  the  repair 
of  aerial  plant  incidental  thereto,  together  with  employees  at  small 
exchanges  who,  in  addition,  repair  central  office  equipment  and  in- 
stall station  equipment,  such  as  line  foremen,  linemen,  climbers, 
groundmen,  troublemen,  line  inspectors,  station  installation  foremen, 
P.  B.  X  and  P.  A.  X.  (private  automatic  exchange)  foremen,  station 
installers,  P.  B.  X-  and  P.  A.  X.  installers  and  installers'  helpers. 

Note. — Where  an  employee  is  assigned  both  to  line  and  station  work  and  to 
cable  and  conduit  work,  he  should  be  classed  in  accordance  with  the  prepon- 
derating character  of  his  work. 

16.  CABLE  AND  CONT)UIT  CONSTRUCTION  AND  MAINTE- 

NANCE MEN. 

Include  under  this  head  employees  engaged  in  the  construction, 
modification,  or  maintenance  of  underground  conduit,  the  placing, 
rearrangement,  or  removal  of  underground,  house,  block,  or  sub- 
marine cable,  or  the  testing  or  splicing  of  cable,  and  those  in  immedi- 
ate charge  of  one  or  more  phases  of  this  work,  such  as  conduit  fore- 
men,  masons,   masons'   helpers,   tile   layers,   concretemen,   conduit 


10 

laborers,  paving  foremen,  pavers,  cable  foremen,  cablemen,  splicing 
foremen,  splicers,  and  splicers'  helpers. 

17.  ALL  OTHEE  EMPLOYEES. 

Include  under  this  head  employees  not  provided  for  in  other 
groups,  such  as  nurses,  matrons,  teamsters,  chauffeurs,  yard,  shop, 
and  miscellaneous  foremen,  storekeepers,  stable  and  garage  men, 
shopmen,  janitors,  porters,  watchmen,  elevator  operators,  cooks,  wait- 
resses, dishwashers,  directory  carriers,  miscellaneous  laborers,  etc. 

Grouping  of  clastfCft  of  employees  for  annual  reports  of  telephone  eotnpanies 

to  Interstate  (jommerec  Commission, 


Group 

Class  A  Companies. 

Class  B  Companies. 

Class  C  Companies. 

No. 

Title. 

Title. 

Title. 

1 

General  officers  and  assist- 

General officers  and  as- 

ants. 

sistants. 

Officers   and   operating 

2 

Operating  officials  and  as- 

Operating officials  and 

heads. 

sistants. 

assistants. 

3 

Attorneys    and    right-of- 

Attorneys  and  right-of- 

' 

way  agents. 

way  agents. 

4 

Engineers. 

I  Engineers,  draftsmen, 

Attorneys,  engineers, 

5 

Draftsmen,  surveyors, 

surveyors,    and    stu- 

and accountants. 

and  student  engineers. 

dent  engineers. 

e 

Accountants. 

Accountants, 

7 

Clerical  employees. 

Clerical  employees. 

Clerical  employees. 

8 

Local  managers. 

Local  managers. 

Local  managers  and 

9 

Commercial  agents. 

Commercial  agents. 

commercial  agents. 

10 

Experienced  switchboard 

Experienced  switch- 

■ 

operators. 

board  operators. 

Operators   and   service 

11 

Operators  in  training. 

Operators  in  training. 

inspectors. 

12 

Sendee  inspectors. 

Service  inspectors. 

. 

13 

Supervi.sing  foremen. 

14 

Central  office  installation 
and  maintenance  men. 

• 

15 

Line  and  station  construc- 
tion, installation,  and 
maintenance  men. 

Plant  construction  and 

• 

maintenance  men. 

Plant  construction  and 
maintenance  men. 

16 

Cable  and  conduit  con- 
struction and  mainte- 

nance men. 

• 

17 

All  other  employees. 

All  other  employees. 

All  other  employees. 

*. 


ADDITIONAL  COPIES 

OF  THIS  PUBUCATION  MAY  BE  PROCLTIED  FROM 

THE  SUPERINTENDENT  OF  DOCUMENTS 

GOVERNMENT  PRINTING  CFHCE 

WASHINGTON,  D.  C. 

AT 

5  CENTS  PER  COPY 
V 


> 


O 


; 


i 


XJNIFORM  SYSTEM  OF  ACCOUNTS 

FOR 

TELEGRAPH  AND  CABLE 

COMPANIES 

(EXCLUSIVE  OF  WIRELESS  TELEGRAPH  COMPANIES) 

AS  PRESCRIBED  BY  THE 

INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


FIRST  ISSUE 
Effective  on  January  1,  1914 


washington 
government  printing  office 

1918 


SCHOOL  OK  BUSINESS 
OOLUMBiA  UNIVERSITY 


CONTENTS. 


Tbm  Intebstate  Gommzroi  Coiociflaox. 


Edoab  B.  Clabk,  of  loioa, 
JuDsoN  C  Clemekts,  of  Oeorffia, 
Chableb  a.  Pboutt,  of  Vermont. 
3 HUES  S.  Hablan,  of  IlUnnU. 
Chableb  C.  McChobd,  of  Kentue^. 
Balthabab  H.  MmtB,  of  Wiscofuin. 
OoBJi  H.  MiLBBUE,  of  California. 

Geobob  B.  McQuiTr,  B€artt^f% 

(2) 


Pafe. 

Order  of  the  Commission • & 

Introductory  letter 7 

General  instructions: 

1.  Balance-sheet  accounts  defined 9 

2.  Cost  or  book  value  of  securities  owned 9 

8.  Reacquired  securities 9 

4.  Discount  and  premium  on  capital  sttx-k 10 

6.  Discount,  expense,  and  premium  on  funded  debt 10 

6.  Contingent  assets  and  liabilities 11 

7.  Pl»nt  and  equipment  defined 11 

8.  Costs  to  be  actual  money  costs 12 

9.  Interest,  debt  discount,  and  debt  expense  durini;  oonBtniction  period.  12 

10.  Costs  of  labor,  materials,  and  supplies 12 

11.  Plant  and  equipment  and  other  property  purchaaed 13 

12.  Plant  and  equipment  withdrawn  or  retired ...••.  13 

13.  Income  account  defined 14 

14.  Taxes H 

15.  Profit  and  loss  account  defined 15 

16.  Operating  revenues  defi  ned 15 

17.  Deductions  from  revenues 15 

18.  Commissions 15 

19.  Repairs  defined • 15 

20.  Cost  of  repairs 16 

21.  Depreciation  of  plant  and  equipment 16 

22.  Extraordinary  casualties  and  unanticipated  reconstruction 17 

23.  Joint  operating  expenses 17 

Balance-sheet  statement 19 

Text  for  accounts  in  the  balance-sheet  statement 21 

Plant  and  equipment  accounts 33 

Text  for  plant  and  equipment  accounts 35 

Income  statement ^3 

Text  for  accounts  in  the  income  statement 45 

Profit  and  loss  account 51 

Text  for  profit  and  loss  accounts 53 

Operating  revenue  accounts 57 

Text  for  operating  revenue  accounts 59 

Operating  expense  accounts 63 

Text  for  operating  exix-nse  accouiitj^ 65 

Text  pertaining  to  clearing  accounts 72 

Index 75 


At  a  General  Session  of  the  INTERSTATE  COMMERCE 
COMMISSION,  held  at  its  office  in  Washington,  D.  C. 
on  the  13th  day  of  October.  1913. 

The  subject  of  a  Uniform  System  of  Accounts  to  be  prescribed  for 
tnd  kept  by  telegraph  companies  and  cable  companies  being  under 
consideration,  the  following  order  was  entered : 

It  is  ordered,  That  the  Uniform  System  of  Accounts  for  Telegraph 
and  Cable  Companies  with  the  text  pertaining  thereto,  embodied  in 
printed  form  to  be  hereafter  known  as  P'irst  Issue,  a  copy  of  which 
is  now  before  this  Commission,  be,  and  the  same  is  hereby,  approved ; 
that  a  copy  thereof  duly  authenticated  by  the  Secretary  of  the  Com- 
mission be  filed  in  its  archives,  and  a  second  copy  thereof,  in  like 
manner  authenticated,  in  the  oflSce  of  the  Division  of  Carriers'  Ac- 
counts; and  that  each  of  said  copies  so  authenticated  and  filed  shall 
be  deemed  an  original  record  thereof. 

It  is  further  ordered,  That  the  said  Uniform  System  of  Accounts 
for  Telegraph  and  Cable  Companies  with  the  text  pertaining  thereto 
be,  and  the  same  is  hereby,  prescribed  for  the  use  of  telegraph  com- 
panies and  cable  companies  (exclusive  of  wireless  telegraph  com- 
panies) subject  to  the  provisions  of  the  act  to  regulate  commerce  as 
amended,  in  the  keeping  and  recording  of  their  accounts;  that  each 
and  every  such  carrier  and  each  and  every  receiver  or  operating 
trustee  of  any  such  carrier  be  required  to  keep  all  accounts  in  con- 
formity therewith ;  and  that  a  copy  of  the  said  First  Issue  be  sent  to 
each  and  every  such  carrier  and  to  each  and  every  receiver  or  operat- 
ing trustee  of  any  such  carrier. 

It  is  further  ordered.  That  any  such  carrier  or  any  receiver  or 
operating  trustee  of  any  such  carrier  may  subdivide  any  primary 
account  in  the  said  First  Issue  established;  or  may  make  assignment 
of  the  amount  charged  to  any  such  primary  account  to  operating 
divisions,  to  its  individual  lines,  or  to  States:  Provided,  however, 
That  such  subprimary  accounts  set  up  or  such  assignments  made  by 
any  such  carrier  or  by  any  receiver  or  operating  trustee  of  any  such 
carrier  shall  not  impair  the  integrity  of  the  accounts  hereby  pre- 
scribed. 

It  is  further  ordered,  That  in  order  that  the  basis  of  comparison 

with  previous  years  be  not  destroyed,  any  such  carrier  or  any  receiver 
or  operating  trustee  of  any  such  carrier  may,  during  the  twelve 
months  from  the  time  that  the  said  First  Issue  becomes  effective,  keep 

X6) 


I 

I 


6 

ZS'::!^^:''^,:''  ^  «--"'«  ^^^^y  prescribed,  s,.ch 
for  the  purpose  of  surh  nL^    •  !    operating  trustee  thereof, 

-  may  be  desiS TMhat  pur^r"''^  ''^'"'"'^  '^^'^''^  P'--»-d 

hereby  prescribed,  .ay,  u^nl^ot^rS  "deld  'Eplv  LT ""*" 
or  experimental  accounts  the  ournoc*  „,„':r'.''?P  ""7  temporary 
efficiency  of  operation:  ProvLTZevt  That  s«'.W  '""'"'  "'' 
experimental  accounts  shall  not  impah-  th^'inte«itv  *  "'''''■"'■^  "' 
account  hereby  prescribed.  integrity  of  any  primary 

/<  M /«r<A«r  <jrrfererf.  That  Januarv  1   laiA  k-       j-    ,       . 
as  the  date  on  which  the  said  SlsLe  of  th^'iT^;'  ^'"f^^  ^^"'^ 
Accounts  for  Teleffraoh  and  r«hU  p7^        ■      I V"''"™  S^^***"  »' 

By  the  CommiSJnf  Companies  shall  become  effective. 

*  George  B.  McGinty, 


INTRODUCTORY  LETfER. 


Interstate  Commerce  Commission, 

Division  of  Carriers'  Accounts, 

Washington,  October  IS,  191S, 

To  Teijcgrafh  and  Cable  Companies: 

This  Uniform  System  of  Accounts  for  Telegraph  and  Cable  Com- 
panies is  issued  in  accordance  with  an  order  of  the  Interstate  Com- 
merce Commission,  the  text  of  which  immediately  precedes  this 
letter.  The  act  to  regulate  commerce,  as  amended,  invests  the  Com- 
mission with  authority  to  prescribe  the  forms  of  accounts  to  be  kept 
by  telegraph  and  cable  companies  subject  to  the  act,  and  prohibits 
the  use  of  any  accounts  other  than  those  prescribed  by  the  Com- 
mission. The  observance  of  the  rules  and  regulations  stated  in  this 
system  of  accounts  therefore  becomes  obligatory  upon  persons  having 
direct  charge  of  the  accounts  of  the  companies  concerned,  and  such 
persons  will  be  held  responsible  for  their  proper  application. 

In  formulating  this  system  of  accounts  it  has  been  the  endeavor 
of  the  Division  of  Carriers'  Accounts  to  enlist  the  cooperation  of 
the  various  telegraph  and  cable  companies.  For  that  purpose  Ac- 
counting Series  Circular  No.  31,  containing  a  tentative  system  of 
accounts,  was  submitted  to  all  such  companies  of  which  there  was 
record,  and  due  consideration  was  given  to  all  criticisms  and  sugges- 
tions received. 

Accounting  officers  are  invited  to  correspond  with  this  office  should 
question  arise  with  regard  to  the  correct  interpretation  of  any  ac- 
count or  rule  herein  prescribed,  in  order  that  uniformity  may  be 
secured  in  the  application  of  the  provisions  of  the  classifications. 

Fred  W.  Sweney, 
Chief  Examiner  of  Accounts* 


^ 


I    ; 
I    i 


.»YI'-t  ., 


/ 


\ 


\ 


GENERAL  INSTRUCTIONS. 


Telegraph  and  cable  companies  shall  keep  their  records  in  such  manner 
as  to  show  fully  the  facts  connected  with  matters  covered  by  the  accounts 
provided  herein.  When  impracticable  to  record  full  information  in  the  gren- 
eral  books  the  entries  therein  shall  be  supported  by  other  records  in  which 
the  details  shall  be  fully  stated,  and  the  entries  in  the  greneral  books  shall 
contain  such  reference  to  the  detail  records  as  will  enable  the  user  to  readily 
identify  the  detail  records  and  the  matters  therein  recorded.  The  detaU 
records  shall  be  filed  in  such  a  manner  as  to  be  readily  accessible  for  examina- 
tion by  representatives  of  the  Interstate  Commerce  Commission. 

1.  Balaace-theet  aecouBtt  dellned. — By  halance-nhect  accounts  are  meant  those 
titles  under  which  the  ledger  neeounts  nre  combined  iind  summarized  to  show 
the  tissets.  linbiiities.  and  profit  and  loss  of  the  business  nt  a  given  time. 
Where  (lie  title  nnd  definition  uf  n  halance-sheet  account  clearly  Indicate  that  it 
Is  a  summary  of  other  accounts.  It  is  not  required  that  o  special  ledger  account 
shall  be  raised  under  such  n  title  to  include  the  tmlances  from  the  accounts 
usually  carried  on  the  ledger. 

2.  Co»t  or  book  value  of  tecaritiet  owned. — ^The  term  cost  or  hook  value,  as 
applied  to  accounts  representing  securities  owned.  Is  Intended  to  recognize  the 
option  of  the  comriany  of  carrying  Its  Investments  In  securities  either  at  cost 
or  nt  a  reasonable  valuation  other  than  cost.  Whenever  securities  nre  acquired 
they  are  to  be  entered  on  the  books  ot  cost.  If,  subsequently,  the  company 
desires  to  adjust  their  value  on  account  of  substantial  appreciation  or  depre- 
dation, the  entries  in  Its  books,  with  respect  to  such  securities,  as  well  as  Its 
annual  reiiort  to  the  Commission,  should  clearly  show  the  reasons  for  making 
the  adjustments. 

S.  Keacqaired  securiticf.— The  capital  stock  and  funded  debt  liability  ac- 
counts in  the  balance  sheet  are  Intended  to  Include  only  the  par  value  of  such 
copitni  stock  or  funded  debt  securities  as  hnve  been  actually  issued  to  bona  fide 
holders  for  value  nnd  nre  outstanding  at  the  date  of  the  balance-sheet  state- 
meut,  nnd  pnr  value  of  such  securities  as  have  been  issued  by  other  companies 
and  have  been  assumed  hy  the  nccountlng  company,  and  nre  outstanding. 

When  capital  stock  or  funded  debt  securities  have  been  actually  issued  by 
the  company  to  bona  fide  holders  for  value  or  (after  such  Issue  by  nnother  com- 
pany) have  been  assumed  by  the  nccountlng  company  and  after  such  Issue  or 
assumption  have  been  reacquired  by  the  company  under  circumstances  which 
require  that  they  shall  not  be  trented  ns  pnld  or  retired,  they  mny  be  charged 
at  par  value  to  the  appropriate  nsset  nccount,  but  on  the  balance-sheet  state- 
ment they  should  be  shown  separately  as  a  deduction  from  both  the  nsset  and 
liability  accounts  In  order  that  the  asset  accounts  for  securities  owned  shall 
include  only  securities  of  other  companies  and  that  the  liability  accounts  for 
•ectirlties  Issued  or  assumed  shall  include  only  those  In  the  bauds  of  the  public 

If  any  such  securities  are  reocqulred  for  more  or  less  than  their  par  value* 
the  difference  between  the  par  value  and  the  cost  of  reacquirement,  after  adjust- 

(0) 


> 


" 


10 

Ing  any  amonots  carried  In  the  discount  and  pn»mlnm  accounts  or  other 
accounts  with  respect  to  such  securities,  should  be  debited  or  credited  to 
Profit  nnd  Loss  Account,  unless  rencqulred  for  a  sinking  or  other  fund  which 
is  required  to  be  represented  by  n  reserve.  In  which  cnse  the  difference  should 
be  debited  or  credited  to  the  npproprlnte  reserve  account. 

4.  Disconnt  and  premium  on  capital  stock.— Ledger  accounts  should  be  pro- 
Tided  to  cover  the  discounts  nnd  premiums  on  ench  cinss  of  capital  stock 
Issued  or  as.sunied  by  the  company.  By  discount  is  meant  the  excess  of  th^ 
par  value  of  stocks  issued  or  assumed  over  the  actual  money  value  of  the 
consideration  received  for  such  stock ;  by  premium  Is  meant  the  excess  of  the 
actual  money  value  of  the  consideration  received  for  stock  Issued  or  assumed 
over  the  par  value  of  such  stock.  Entries  in  these  accounts  representing 
discounts  should  be  carried  therein  until  offset  (1)  by  premiums  realized  on 
subsequent  sales  of  the  same  class  of  stock,  (2)  by  assessmeuts  levied  on  the 
Btockholders,  (3)  by  periodical  charges  to  Profit  and  I^ss  or  (4)  by  chargea 
to  Profit  and  Loss  upon  reacqulreuieut  of  the  stock.  Entries  in  these  account* 
representing  premiums  realized  should  be  carried  permanently,  unless  offset 
(1)  by  discounts  suffered  on  sales  of  the  same  class  of  stock  or  (2)  by  credits 
to  Profit  and  Loss  upon  reacqulrement  of  the  stock. 

If  the  net  of  the  balances  In  the  discount  nnd  premium  accounts  for  all  classes 
of  capital  stock  sold  or  exchanged  is  a  debit  balance,  the  amount  should  be 
included  In  the  balance-sheet  statement  in  account  No.  125,  "  Unextinguished 
discount  on  capital  stock**;  if  a  credit  balance,  the  amount  should  be  shown 
in  account  No.  152,  "Premiums  on  capital  stock.'* 

In  no  case  should  discount  on  capital  stock  be  charged  to  or  included  in  any 
account  as  a  part  of  the  cost  of  acquiring  any  property,  tangible  or  intangible* 
or  as  n  part  of  the  cost  of  operation. 

6.  Discount,  expense,  and  premium  on  funded  debt — I.«edger  accounts  should 
be  provided  to  cover  the  discounts,  expense,  and  premiums  op  each  class  of 
funded  debt  issued  or  assumed  by  the  company. 

By  discount  is  meant  the  excess  of  the  par  value  of  funded  debt  securities 
issued  or  assumed,  and  the  accrued  interest  thereon,  over  the  actual  cash 
Talue  of  the  consideration  received  lor  such  securities;  by  premium  Is  meant 
the  excess  of  the  actual  cash  value  of  the  consideration  received  for  funded 
debt  securities  Issued  or  assumed  over  the  par  value  of  such  securities  and 
the  accrued  interest  thereon. 

By  expense  is  meant  all  expenses  In  connection  with  the  Issue  nnd  sale  of  evi- 
dences of  debt,  such  as  fees  for  drafting  mortgages  and  trust  deeds,  fees  and 
taxes  for  recording  mortgages  nnd  trust  deeds;  cost  of  engraving  and  printing 
bonds,  certificates  of  Indebtedness,  and  other  commercial  paper  having  a  life 
of  more  than  one  year;  fees  pnid  trustees  when  provided  for  In  mortgages  and 
trust  deeds;  fees  and  commissions  paid  underwriters  and  brokers  for  marketing 
snch  evidences  of  debt;  and  other  like  expenses. 

If  tlie  net  bnlnnce  In  any  of  these  accounts  Is  a  debit,  there  should  be  charged 
to  income  account  No.  320,  "Amortization  of  debt  discount  and  expense,** 
during  each  fiscal  period  (and  credited  to  the  discount  and  premium  accounts 
in  which  the  discount  and  expense  is  carried)  such  proportion  of  the  discount 
and  expense  on  the  outstanding  funded  debt  obligations  as  mny  be  applicable 
to  that  period.  This  proportion  shoul^  be  determined  according  to  a  rule,  tlie 
onlform  application  of  which  throughout  the  interval  between  the  date  of  sale 
and  the  date  of  maturity  will  extinguish  the  discount  nnd  expense  on  the  funded 
debt.  The  charge  to  Income  for  any  period  should  not  exceed  the  proportion 
applicable  to  that  period,  and  a  charge  should  be  made  for  each  period  so  long 


i 


»j 


u 

as  any  portion  of  the  discount  and  expense  remains  unextinguished.  In  order 
that  the  discount  and  expense  may  be  extinguished  sooner,  the  company  may, 
at  Its  option,  charge  to  Profit  and  Loss  all  or  any  portion  of  the  discount  and 
exr>en.se  on  funded  debt  remaining  at  any  time  unextinguished. 

If  the  net  balance  in  any  of  these  accounts  is  a  credit,  there  should  be 
credited  to  income  account  No.  327,  "  Release  of  premiums  on  debt — Cr.,** 
during  each  fiscal  period  (and  debited  to  the  discount  and  premium  accounts 
in  which  the  premium  Is  carried)  such  proportion  of  the  premium  on  out- 
standing funded  debt  obligations  as  may  be  applicable  to  that  period.  This 
proiK)rtIon  should  be  determined  according  to  a  rule,  the  uniform  application 
of  which  throughout  the  interval  between  the  date  of  sale  and  the  date  of 
maturity  of  the  debt  will  extinguish  the  premium  at  which  such  debt  was  sold. 

If  the  net  of  the  balances  In  the  discount  and  premium  accounts  for  all  classes 
of  funded  debt  sold  or  exchanged  is  a  debit  balance,  the  amount  should  be 
included  In  the  balance-sheet  statement  in  account  No.  126,  "  Unamortized  debt 
discount  and  expense**;  if  a  credit  balance,  the  amount  should  be  included  in 
account  No.  ICO,  "Unextinguished  premium  on  debt*' 

No  discount  and  expense  on  funded  debt  should  be  charged  to  or  included  in 
any  account  as  a  part  of  the  cost  of  operation  or,  except  as  provided  in  section 
0,  page  12.  as  a  part  of  the  cost  of  acquiring  any  property,  tangible  or  intangible. 

6.  Contingent  assets  and  liabilities. — Contingent  assets  and  liabilities  should 
not  t>e  Included  in  the  body  of  the  balance-sheet  statement,  but  should  be  shown 
In  detail  in  a  supplementary  statement  accompanying  the  balance-sheet  state- 
ment Contingent  assets  are  those  without  value  to  the  accounting  company 
until  the  fulfillment  of  conditions  regarded  as  uncertain.  Contingent  liabilitieM 
Include  items  which  may,  under  certain  conditions,  become  obligations  of  the 
company,  but  are  neither  direct  nor  assumed  obligations  on  the  date  of  tlw 
tMilance  sheet 

7.  Plant  and  equipment  defined. — The  plant  and  equipment  accounts  of  a 
company  (frequently  termed  the  construction  accounts)  should  Include  the 
investment  In  property,  both  tangible  and  Intangible,  devoted  to  accomplishment 
of  the  purposes  of  the  company's  business,  and  which  has  an  expectation  of  life 
In  service  of  more  than  one  year  from  date  of  installation  In  service,  excluding 
hand  tools  and  other  small  portable  tools  liable  to  be  lost  or  stolen. 

Plant  and  equipment  consists  of  original  plant  and  equipment,  additions, 
betterments,  and  rep/acemenf«,  and  the  cost  thereof  should  be  charged  as 
directed  below. 

Original  plant  and  equipment  is  that  installed  or  acquired  prior  to  the  be- 
ginning of  regular  operations  by  the  company.  As  applied  to  a  telegraph  or 
cable  company.  It  Includes  the  acquisition  or  construction  of  the  plant  neces- 
sary to  begin  the  regular  telegraph  or  cable  operations.  The  cost  of  original 
plant  and  equipment  should  l>e  charged  to  the  appropriate  book  accounts  under 
account  No.  100,  "Plant  and  equipment  to  January  1,  1914,**  or  to  the  pre- 
scribed plant  and  equipment  primary  accounts  under  account  No.  101,  "Plant 
and  equipment  since  December  31,  1913.** 

Additions  are  structures,  facilities,  equipment,  and  other  properties  added 
to  thoFe  in  service  at  the  beginning  of  operations,  and  not  taking  the  place  of 
any  property  of  like  purpose  previously  held  by  the  company.  The  cost  of 
additions  should  be  charged  to  the  appropriate  plant  and  equipment  primary 
accounts  under  account  No.  101,  "Plant  and  equipment  since  December  31, 

1913.** 

Betterments  are  physical  changes  In  structures,  facilities,  ok*  equipment 
which  have  as  their  primary  aim  and  result  the  making  of  the  properties 
affected  more  useful  or  of  greater  capacity  than  they  were  at  the  time  of  their 


!l 


ii 


12 

Instflllatloii  or  acquisition.  Of  the  cbanpe*  Incident  to  betterments  the  cost  of 
such  portion  only  ns  will,  when  ndded  to  the  original  cost  of  the  property  bet- 
tered, give  the  cost  of  reconstnictlon  In  present  condition  of  the  pro|>erty  as 
bettered,  should  be  charged  as  plant  and  equipment  to  the  appropriate  primary 
accounts  under  account  No.  101.  **  Plant  and  equipment  since  December  31.  iniS.** 
The  remainder  of  the  cost  of  the  changes  should  be  classed  as  a  repair  and  IM 
charged  to  the  appropriate  ©iterating  expense  accounts,  or  to  the  reserve  account. 
If  provision  has  been  made  therein. 

/2ep/acemcnf«  are  those  Installations  of  plant  and  equipment  which  have  for 
their  purpose  the  substitution  of  one  building,  structure,  piece  of  equipment, 
or  machine  for  another  which  It  has  become  necessary  to  retire,  the  substi- 
tute having  substantially  no  greater  capacity  than  the  plant  and  equlimient 
replaced;  also  extensions  of  the  life  i^erlod  of  franchises,  patents,  and  other 
Intangible  Investment.  The  cost  of  the  plant  and  equipment  retired  should  be 
credited  to  the  accounts  In  which  It  Is  carried,  and  the  cost  of  the  plant  and 
equipment  Installed  In  place  of  that  so  retired  should  be  charged  to  the  appro- 
priate primary  accounts  under  account  No.  101,  "  riant  and  equipment  since 
December  31.  1913.'* 

&  Cost!  to  be  actual  money  costi.— All  charges  made  to  plant  and  equipment 
or  other  proi)erty  accounts  with  respect  to  any  property  acquired  on  or  after 
January  1,  1914,  should  be  the  actual  money  costs  of  the  property.  When  the 
consideration  actually  given  for  anything  with  respect  to  which  a  charge  is 
made  to  any  plant  and  equipment  or  other  property  account  Is  anything  other 
than  money,  the  actual  consideration  should  be  described  In  the  entry  with 
sufficient  fullness  and  particularity  to  Identify  It.  and  the  amount  charged 
ahould  be  the  actual  money  value  of  such  consideration  at  the  time  of  the 
transaction. 

9.  Interest,  debt  discount,  and  debt  expense  during  constmction  period.— 
All  Interest,  debt  discount,  and  debt  expense  assignable  to  the  construction 
period  should  be  carried  in  account  No.  229.  "Interest  during  construction.* 
and  not  distributed  to  the  various  plant  and  equipment  accounts  to  which  such 
accruals  relate.  Account  No.  229  should  Include  only  such  proportion  of  the 
Interest  on  funds  used  for  con.structlon  pun^ses  and  of  the  discount  and  e.^i^ense 
on  funded  debt  as  Is  equitably  assignable  to  the  period  between  the  date  of 
the  issuance  of  securities  and  the  time  when  the  property  acquired  or  the 
improvement  made  through  such  issuance  becomes  available  for  the  service 
for  which  it  is  Intended. 

10.  Costs  of  labor,  materials,  and  supplies.— The  term  cost  as  used  In  the  plant 
and  equipment  (or  conptructlon)  accounts  means  the  actual  cost  In  money  of 
labor  and  materials  used  in  construction,  the  actual  cost  In  money  of  property 
acquired  after  construction,  or.  If  the  consideration  given  Is  other  than  money, 
the  actual  money  value  of  such  other  consideration  at  the  time  of  tlie  purchase. 
Coat  of  labor  includes  not  only  wages,  salaries,  and  fees  paid  employees,  but 
also  personal  expenses  of  such  employees  when  borne  by  the  company.  CoMt  of 
materials  and  supplies  consumed  In  construction  Is  the  cost  at  the  places  where 
they  enter  into  construction,  including  cost  of  transportation  and  Inspection 
when  si)€clflcally  assignable.  If  such  materials  and  supplies  are  passed  through 
storehouses,  their  cost  entered  in  the  account  may  include  a  suitable  proportion 
of  store  expense. 

If  officers  and  employees  of  an  operating  company  are  specially  assigned  to 
construction  worlt.  or  If  they  devote  a  substantial  portion  of  their  time  to  such 
work,  the  proper  proportion  of  their  salari*^  and  expenses  should  be  charged 
to  Plant  and  Equipment    No  charge,  however,  should  be  made  to  plant  and 


13 

fqnipment  acconnts  for  InHdental  services  of  officers  and  employees  whose 
time  ii*  regularly  «levoitMl  to  the  o|)enition  and  maintenance  of  the  plant. 
.  II.  Plant  and  equipment  and  other  property  purchased. — When  any  property 

I  in  tlie  form  of  a  p>ing  ur  ctuupletcd  plant  Is  purchased,  an  appraisal  of  the 
T  pro|N*rty  so  acquired  should  i»e  nunle.  and  the  different  constituent  elements 
I  of  the  plant  (and  efiulpmont,  if  any)  or  other  property  acquired  should  be 
•ppniisetl  at  tlieir  structumi  value:  that  Is  to  say.  at  the  estimated  cost  of 
replacement  or  repHKluctlon  less  existing  deterioration  through  wear  and  tear, 
obHoU^Mcence.  ami  inadequacy. 

if  tlie  actual  money  value  of  the  conskleratlon  given  for  the  plant  or  other 
pr»|terty  was  nt  tiie  time  of  the  acquisition  In  excess  of  such  appraised  value, 
tlie  e.\cexs  shoultl  be  charged  to  account  No.  2(i:i,  "Other  Intangiliie  capital." 
and  tlie  appraised  values  of  the  constituent  elements  should  l>e  charged  to  the 
a|»pr(»prlaie  plant  and  equipment  accounts.  If  the  actual  money  value  of  the 
coiisidenition  given  was  not  In  e.xcess  of  such  appnilsed  value,  such  actual 
money  value  should  be  dlsrrltuited  through  the  said  accounts  in  profiortlon  to 
the  saltl  appraised  value  of  the  constituent  elements  appropriate  to  the  re- 
Bfiectlve  accounts. 

12.  Plant  and  equipment  withdrawn  or  retired. — When  plant  and  equipment 
Is  wltlidniwii  or  retired  fmm  senice  for  any  cause  the  rules  here  following 
■bouid  govern  the  accounting: 

(0)  Wlien  any  tangible  plant  and  equipment  of  the  company  acquired  prior 
to  January  1.  1914.  Is  withdrawn  or  retired  from  service  for  any  cause,  the 
amount  nt  which  it  stantls  charged  should  l>e  credited  to  the  l>ook  account 
In  which  It  Is  chargetl  under  account  No.  100.  "Plant  and  equipment  to 
January  1.  1914."  and  such  amount  i»lus  the  exi>ense8  Incident  to  the  retirement, 
loHK  I  he  value  of  salvage,  sliould  l>e  charged  (1)  to  account  No.  170.  "  Ueserve 
for  accrue*!  depreciation."  for  tiie  proportion  applicable  to  the  period  covered  by 
tlie  reserve:  and  (2)  to  acc<»unt  No.  413.  "  Reiilixed  depreciation  not  covereil  by 
renerves."  for  the  remainder.  Such  portion  only  of  the  realized  depreciation 
should  l»e  chnrgwi  to  accituiit  No.  170.  "  Iteserve  for  accrued  depreciation."  as 
Is  due  to  life  In  service  during  the  period  for  which  the  reserve  was  established. 
This  iMirtlon  may  tie  estimateti  on  the  basis  of  the  (irofiortion  which  the  life  in 
servU-e  of  the  pn»|»erty  after  that  date  l>ears  to  Its  entire  life  In  service. 

The  entry  of  the  cre<lit  to  the  ftlant  and  equipment  accounts  should  cite  by 
name  and  |>age  of  iMxtk  or  other  record  the  original  entry  of  cost  of  the  thing 
uiilidrawn.  If  tiiere  Is  no  such  original  entry,  that  fact  should  t>e  stated  in 
ii innei*! Ion  with  the  creilit  entry,  and  the  actual  amount  originally  charged 
should  lie  cre<Iite4l.  If  such  amount  Is  not  known.  It  should  be  estimated,  the 
factM  u|N>n  which  the  tnttiniafe  1h  liased  and  the  name  of  the  [>erson  by  whom 
estimated  should  be  shown,  and  the  amount  thus  estimated  to  be  equivalent  to 
the  original  charge  In  resftect  of  such  thing  withdrawn  should  be  credited  to 
the  plant  and  (M|nlpnient  acctuint  Involved. 

ih)  When  any  tangible  plant  iind  eqnliiment  of  the  company  acquired  since 
|Vceinl»er  31.  I!n3.  Is  withdrawn  or  retired  from  service  for  any  cause,  the 
amount  at  which  It  stands  charged  should  be  credited  to  the  plant  and  equl|>- 
ment  accouiii  In  which  It  is  chargeil.  and  such  amount  plus  the  expenses  inci- 
dent to  ihe  retireiiient.  less  the  value  of  salvage,  should  be  charged  to  account 
No.  I7«.  "  Iteserve  for  accrued  depreciation." 

Tlie  entry  of  tlie  credit  to  the  plant  and  equipment  account  should  cite  by 
name  and  |Nige  of  book  or  other  record  the  original  entry  of  cost  of  the  tiling 
withdrawn. 


{!■ 


iMl 


14 

(o)  If  tbe  age  of  tangible  plant  and  equipment  withdrawn  or  retired  from 
Berxice  cannot  be  deteruiioed  for  cinssiflcatlon  between  account  No.  100,  **  Plant 
and  equipment  to  January  1.  1014,"  and  account  No.  101,  "Plant  and  equip- 
ment since  I>ecember  31.  1013,'*  the  proi)erty  so  retired  should  be  treateil  ai 
having  been  charged  to  the  former  account,  and  the  necessary  credits  should 
be  made  to  the  book  accounts  thereunder. 

(tf)  When  any  tangible  plant  and  equipment  Is  withdrawn  or  retired  whose 
book  value  as  carried  in  the  plant  and  equipment  accounts  has  been  reduced 
by  writing  off  estimated  depreciation,  only  that  part  of  the  realized  deprecia- 
tion which  has  not  already  l>een  written  off  should  be  charged  to  account 
Na  170,  "  Resen'e  for  accrued  depreciation,"  or  to  account  No.  413,  **  Iteullzed 
depreciation  not  covered  by  reserves." 

(e)  When  any  plant  and  equipment  is  withdrawn  or  retired  whose  book 
Talue  is  greater  than  the  known  or  estimated  cost,  such  excess  should  be  charged 
to  account  No.  417,  **  Miscellaneous  debits,"  and  the  realized  depreciation  should 
be  charged  as  elsewhere  directed. 

(/)  If  any  plant  and  equipment  Is  sold  for  more  than  its  original  cost  the 
amount  of  depreciation,  if  any,  accrued  and  credited  to  a  reserve  in  respect 
thereof,  should  be  determined  as  accurately  as  possible  and  charged  to  such 
reserve.  The  sum  of  the  amount  so  charged  and  the  excess  of  the  selling  price 
over  the  cost  of  the  property  should  be  credited  to  account  No.  401,  **  Miscel- 
laneous credits." 

13.  Income  Account  defined. — ^The  Income' Account  brings  together  those  ac- 
counts that  show  the  total  amount  of  money  that  the  company  has  received 
or  become  entitled  to  receive  for  services  rendered  during  a  given  periiid.  the 
return  accruing  during  the  period  uiwn  investments,  and  the  disbursements  and 
obligations  (fixed  charges)  incurred  that  affect  the  disposition  of  the  amounts 
80  received  or  accrued.  The  net  balance  of  income  (or  loss)  should  be  carried 
to  Protit  and  Loss. 

14.  Taxes. — Separate  accounts  should  be  kept  distinguishing  between  taxes 
related  to  operating  revenues  and  those  related  to  nonofieratiug  revenues,  and, 
if  the  company  engages  in  business  other  than  telegraph  or  cable  operations, 
taxes  applicable  to  such  other  business  should  also  be  kept  separate. 

The  tax  accounts  should  be  charged  each  month  and  an  oi^n  account  entitled 
"Tax  liability  account"  concurrently  credited  with  the  month's  proportion  of 
taxes  applicable  to  the  operations  covered  by  each  account.  If  the  exact  amounts 
of  the  annual  taxes  are  not  known,  they  should  be  estimated  and  one  twelfth 
of  the  estimated  amounts  be  charged  each  month.  From  time  to  time  during 
the  year,  as  the  actual  tax  levies  become  known,  the  monthly  charges  should  be 
adjusted  so  as  to  include  as  neorly  as  may  be  possible  the  total  amount  of 
the  taxes  in  the  period  to  which  they  apply.  When  any  such  tax  bill  Is  actually 
paid,  the  tax  liability  account  should  be  debited  with  the  amount  of  the  pay- 
ment. If  the  balance  in  the  tax  liability  account  is  a  debit  balance,  due  to  the 
prepayment  of  taxes  applicable  to  a  period  subsequent  to  that  for  which  the 
Income  Account  is  stated,  the  amount  of  the  debit  balance  should  be  shown  In 
account  No.  122,  "Prepaid  taxes";  if  the  balance  Is  a  credit  balance  the 
amount  should  be  shown  in  account  No.  1G7,  "  Taxes  accrued." 

Taxes  on  property  lejised  should  be  charge<l  to  the  appropriate  tax  account 
by  the  party  which,  under  the  terms  of  the  lease  contract,  actually  is  obligated 
for  such  taxes.  If  the  other  party  to  the  lease,  as  a  matter  of  convenience, 
pays  the  taxes  to  the  Government  authorities,  such  taxes  should  not  enter  Its  tas 
accounts  but  6lK)uld  be  charged  directly  to  the  party  obligated  for  the  taxes. 


^ 


15 

The  tax  accounts  sbonld  not  Include  any  fees  or  charges  snob  as  water  taxet, 
drainage  taxes,  and  fire  taxes,  which,  although  called  taxes,  are  payments  for 
■ome  sr>ecific  service  rendered  by  the  Government. 

15.  Profit  and  Lost  Account  defined. — This  account  or  summary  is  the  con- 
necting link  between  the  Income  Account  and  the  Balance  Sheet.  It  sum- 
marizes the  changes  In  the  surj^lus  or  deficit  during  a  given  fiscal  period  as 
effected  by  the  oi)erations  and  business  transiictions  during  that  period,  by 
any  disposition  of  net  profits  made  solely  at  the  option  of  the  company,  by 
accounting  adjustments  not  properly  attributable  to  the  period,  or  by  miscel- 
laneous losses  or  gains  not  provided  for  elsewhere.  The  profit  and  loss  balance 
■hould  be  shown  on  the  balance-sheet  statement  under  account  No.  12S,  **  Profit 
and  loss— Debit  balance,"  or  No.  170,  **  Profit  and  loss — Credit  balance." 

16.  Operating  revenues  defined. — By  opera /inyret'enuc^  are  meant  all  amounts 
of  money  which  the  com[)auy  receives  or  becomes  lawfully  entitled  to  recover 
for  services  rendered  and  as  a  return  upon  property  used  by  the  company  in 
its  own  operations.  Credits  to  the  various  revenue  accounts  should  be  based 
opon  the  gross  charges  made  for  services  rendered  by  the  company. 

17.  Deductions  from  revenues. — C>)rrections  of  overcharges,  overcollectloni 
theretofore  credited  and  afterwards  corrected,  authorized  refunds  on  account  of 
errora  or  failures  in  transmission,  and  other  corrections  should  be  charged  to 
the  revenue  account  to  which  they  relate. 

18.  Commissions. — Ck>mmlsslons  allowed  to  othere  for  originating  or  handling 
messages  or  for  other  commercial  service  connected  with  revenue  messages 
should  not  be  charged  to  the  revenue  accounts.  Such  commissions,  when  al- 
lowed company  employees  In  lieu  of  or  In  addition  to  salaries,  should  l>e  charged 
to  the  operating  expense  accounts  chargeable  with  the  salaries  of  such  em- 
ployees. Such  commissions  allowed  other  than  employees  should  be  charged 
to  operating  expense  account  No.  G31,  "Telephone  company  service,"  If  the 
recipients  are  engaged  in  telephone  operations,  or  to  account  No.  632,  *'  Ck)mmi8- 
■ions,"  if  payable  to  others. 

19.  Kepairs  defined. — The  term  repairs,  as  used  In  the  text  of  the  various 
operating  expense  accounts,  includes  ordinary  and  extraordinary  repairs. 

Ordinary  repaire  are  not  required  to  be  taken  into  account  in  fixing  a  rate  of 
depreciation.    They  include: 

(a)  (^Hearing  crosses,  breaks,  grounds,  and  other  line  troubles,  including  rou- 
tine work  intended  to  prevent  such  troubles,  such  as  pulling  up  slack,  tightening 
guys  and  reletting  guy  stubs,  trlnnning  trees,  straightening  poles  and  cross 
arms,  and  cleaning  and  adjusting  apparattis; 

(6)  Replacements  of  minor  or  short-lived  structures,  equipment,  or  facilities, 
or  parts  thereof  not  provided  against  in  the  charge  for  depreciation  of  plant 
and  equipment; 

(r)  Hearrnngements  and  changes  In  location  of  plant  involving  no  substantial 
replacement  or  any  betterment; 

id)  Recovering  salvage  and  removing  retired  or  abandoned  property,  when 
such  costs  are  not  provided  for  In  the  depreciation  reserves. 

Extraordinary  repairs,  which  should  be  provided  for,  so  far  as  may  be  pos- 
sible,  by  charges  to  depreciation,  include: 

(aa)  Restoring  the  condition  of  property  damaged  by  storms,  floods,  fire,  or 
other  casu:ilrles: 

(bb)  Recovering  salvage  and  removing  retired  or  abandoned  property  in  con- 
nection with  above-mentioned  work. 

All  repairs,  whether  ordinary  or  extraordinary,  should  be  charged  to  the 
appropriate  primary  operating  expense  accounts.  Extraordinary  repairs  for 
which  a  reserve  has  been  provided  should  then  be  concurrently  ciiirged  to 


16 

•coonnt  No.  170,  "TtM^nre  for  aocrned  depreciation,**  and  credited  to  account 
Na  Oil,  ••Repairs  charged  to  reHfrveii — Cr.'* 

When  It  Is  iiecessairy  substniitially  to  reconstruct  or  to  replace  a  major  por- 
tion of  any  unit  of  profierty  or  iiuy  important  section  of  a  continnous  structure, 
the  cost  should  l>e  handled  throufsh  the  capital  accounts:  that  Is,  the  cost  of 
tlie  property  removed  or  replaced  should  be  credited  to  the  a|»prupriate  plant 
and  equipment  accounts  and  the  new  profierty  should  lie  charged  thereto. 

20.  Cost  of  repairs. — ^The  term  coti  of  rcftairs,  as  used  In  the  texts  of  the 
▼arlous  operating  ezf^nae  accounts,  should  t>e  understood  to  Include  the  wages, 
Mlarlea.  and  fees  iwld  employees  directly  engaged  in  the  work  of  reiwirs,  \ter- 
aonal  expenses  of  such  employees  when  borne  by  the  comimny.  the  cost  (Includ- 
ing transix>rtation)  of  materials  and  sui^plles  consimied.  and  the  exiiense  of 
fBcilltles  employed  In  making  the  reiwirs,  less  the  value  of  any  salvage  recov- 
ered.  It  Includes  also  the  cost  of  direct  supervision,  such  as  by  foremen  or 
superintendents  of  repair  gangs,  but  does  not  Include  the  cost  of  general  suiier* 
Tision  as  provided  for  In  account  No.  GOO,  **  Su|)ervision  of  maintenance.** 

21.  Deprecifttion  of  plant  and  equipment. — ^IViegraph  and  cable  companies 
should  Include  In  0|)enitlng  exfienses  depreciation  charges  for  the  pur|)ose  of 
creating  pro|)er  and  adequate  reserves  to  cover  the  ex|)enses  of  depreciaiion 
currently  accruing  in  the  tangible  plant  and  equipment  Uy  expense  of  dcpr^ 
dation  Is  meant — 

(a)  T/Osses  suffered  through  the  ctirrent  lessening  In  value  of  tangible  prop- 
erty from  wear  and  tear  not  t-overed  by  current  repjiirs: 

(b)  Obsolescence  or  inadequacy  reHultiiig  from  age.  physical  change,  or  super- 
session  by  reason  of  new  iuveutiuus  and  discoveries,  changes  In  iiopular  demand, 
or  public  reciuirements; 

(r)  Losses  suffered  through  destruction  of  pro[ierty  by  extraordinary  cnsii- 
altiea 

The  rate  of  depreciation  should  be  fixed  so  as  to  distribute,  as  nearly  as  may 
be,  evenly  throughout  the  life  of  the  defirecltitlng  |)ro|ierty  the  bunlen  of  ex- 
traordinary repairs  and  the  cost  of  capital  couHunied  In  oftenitlons  during  a 
given  month  or  year,  and  should  be  based  ufion  the  average  life  of  the  units 
comprised  In  any  class  of  profierty 

The  amount  charged  as  exfiense  of  depreciation  should  be  based  upon  rules 
determined  by  the  accounting  company.  Such  rules  may  be  derived  fnan  a 
consideration  of  the  comimny's  hlstor>'  and  experience.  Com|Ninles  should  be 
preinired  to  furnish  the  Conmilssion.  u|)on  denitind.  the  rules  and  a  sworn  state- 
ment of  facts.  ex|iert  oiilnlons.  and  estimates  U|Mm  which  the  rules  are  based. 

The  estimate  for  depreciation  of  physical  profieity  should  take  into  account — 

(an)  The  gradual  deterioration  and  ultimate  retirement  of  units  of  pro|»erty 
which  may  l»e  satisfactorily  ludi vidua IIsuhI.  such  as  buililings.  machines,  and 
valuable  Instnuiients.  to  the  end  that  by  the  time  such  units  of  pro|ierty  go  out 
of  service  there  shnll  have  l>een  accnnnilatetl  a  reserve  vi\\M\\  to  the  original 
money  cost  of  such  pn»|»erty.  plus  c«)Ht  of  removal,  less  tiie  vjilue  of  any  sil\age; 

{bb\  The  de|)reciation  accruing  In  profsTty  which  can  not  be  readily  Indl- 
Tldu}ilIxe<I.  such  as  |M)le  lines,  wires.  mlileH.  and  «ither  continuous  structures, 
to  llie  end  tliat  when  such  projierty  gi»es  out  of  service  or  when  extensive  re- 
placements  are  nuuic.  there  shall  hsive  lK»en  nccuniulaied  a  reserve  wpml  to  tlie 
original  cost,  plus  the  cost  of  rtMuoval  less  the  value  of  any  ssiivage.  Any 
repairs  t>r  minor  replacements  of  such  structures  made  from  time  to  time  are 
to  be  classed  as  ordinary  repairs  and  '*Jiarged  to  the  primary  reiuir  accounts 
when  nuide. 

The  amount  estimated  to  cover  the  expense  of  deprerlntion  of  plant  and 
equipment  should  l>e  charged  monthly  to  account  .\o.  (MiH.  **  I>epreciiition  of 
plant  and  equlimient.*'  or  to  the  aiM>nM)rI>ite  clearing  account  or  accounts  and 
concurrently  credited  to  account  No.  17U,  **  iteserve  fur  accrued  depreclaUoa." 


f' 


17 

Account  No.  41S,  **  Realized  depreciation  not  covered  by  reserves,**  Is  provided 
in  the  Proflt  and  Loss  Account  for  charges  for  realized  depreciation  on  plant 
and  equipment  retired  when  such  depreciation  occurred  prior  to  the  esbibiish- 
ment  of  account  No.  170,  "  Reserve  for  accrued  depreciation,**  or  1ms  not  been 
provided  for  by  credits  to  that  account 

22.  Extraordinary  eatnalties  and  nnanticipated  recoBstruction. — If  so  anthor- 
Ised,  upon  api)iication  to  the  Commission,  the  company  granted  such  authority 
may  charge  the  amount  named  in  the  authority  to  a  suspense  account  for 
the  purpose  of  distributing  over  a  limited  period  an  extraordinary  loss  of 
such  a  nature  that  It  can  not  be  anticipated  by  the  exercise  of  reasonable 
prudence.  Losses  of  this  sort  may  be  due  to  the  requirement  by  lawful  authority 
or  public  necessity  of  Improvements  Involving  the  abandonment  of  a  consider- 
able portion  of  plant  and  equipment  before  it  has  attained  its  normal  life  in 
service,  or  to  an  extraordinary  casualty  entirely  unforeseen  and  unprovided  for. 

The  original  cost  of  the  property  so  abandoned  or  destroyed  should  be  credited 
to  the  plant  and  equipment  accounts  in  which  it  was  carried,  and  such  portion 
of  the  cost  as  may  be  authorized  by  the  Commission  may  be  charged  to  the 
suspense  account,  the  remainder  of  the  cost,  less  any  salvage,  being  charged 
out  as  elsewhere  provided  in  case  of  retirement  of  property.  The  susi»ense 
account  so  raised  should  be  credited  and  account  No.  GOO,  *'  Extraordinary  de- 
preciation,** debited  monthly  with  such  an  amount  as  will,  through  its  regular 
application,  amortize  the  amount  of  the  loss  at  the  end  of  the  period  designated. 

23.  Joint  operating  expenses. — When  any  operating  expense  is  Incurred  by 
a  company  for  the  Joint  benefit  of  Itself  and  another  under  agreement  for 
apportioning  such  expenses,  the  creditor  company  should  credit  to  its  primary 
expense  or  other  accounts  to  which  the  ex[)eQses  were  charged  when  Incurred, 
the  amounts  billed  by  It  to  the  sharing  company.  The  debtor  company  should 
charge  to  Its  primary  expense  or  other  accounts  the  amounts  so  billed.  Bills  ren- 
dered by  the  operating  company  for  joint  expenses  should  show  tha  expenses 
In  detail. 


6D022*— 13- 


I       t 
I      'i 


a  i'  *, 


(   I  ! 


mi 


BALANCE  SHEET  STATEMENT* 
ASSET  SIDE. 

100.  "Plant  and  Fqttipment  to  January  1,  1914 21 

101.  Plant  and  Equipment  since  December  31,  1913 21 

102.  Construction  Work  in  Progress 21 

103.  Investment  Securities 21 

104.  LoNo-TERM  Advances  Receivable 22 

105.  Miscellaneous  Investments 22 

106.  Cash 22 

107.  SPEaAL  Deposits 22 

108.  Employees' Working  Funds 22 

109.  Marketable  Securities 23 

110.  Bills  Receivable 23 

111.  Accounts  Receivable  prom  Customers  and  Agents 23 

112.  Accounts  Receivable  prom  System  Corporations 23 

113.  Miscellaneous  Accounts  Receivable 23 

114.  Matured  Interest  and  Dividends  Receivable 23 

115.  Materials  and  Supplies 23 

116.  Other  Current  Assets 24 

117.  Unmatured  Interest,  Dividends,  and  Rents  Receivable 24 

118.  Sinking  Fund  Assets 24 

119.  Insurance  and  Other  Reserve  Fund  Assets 24 

120.  Provident  Fund  Assets 25 

121.  Prepaid  Rents 25 

122.  Prepaid  Taxes 25 

123.  Prepaid  Insurance 25 

124.  Other  Prepayments 25 

125.  Unextinguished  Discount  on  Capital  Stock 25 

126.  Unamortized  Debt  Discount  and  Expense 25 

127.  Other  Deferred  Debit  Items 26 

128.  Pkofit  and  Loss — Debit  Balance 26 

LIABILITY  SIDE. 

150.  Capital  Stock 28 

151.  Stock  Liability  for  Conversion  of  Securities 27 

152.  Premiums  on  Capital  Stock 27 

163.  Grants  in  Aid  of  Construction ,.  27 

164.  Funded  Debt 27 

165.  Receiver's  Certificates 28 

166.  Long-term  Advances  Payable 28 

167.  Judgments  Unpaid 29 

158.  Bills  Payable 29 

169.  Audited  Vouchers  and  Wages  Unpaid 29 

160.  Customers'  Deposits .••••••.••••.••.••....„„  28 

(10) 


{' 


I  i 


20 


lei.  Accounts  Patabw  to  SrerrEif  Corporatioh. ^ 

loz.  Miscellaneous  Accounts  Payable  

m.  Matured  Interest.  Dividends,  and  Rents 'un;;^:;;;; !! 

104.  Matured  Funded  Debt  Unpaid 

165.  Service  Billed  in  ADVANct.....ii]i]][]][.' ^ 

166.  Other  Current  Liabilities..  ^ 

167.  Taxes  Accrued 30 

IM.  Unmatured  Interest.*  Dm;;;;;VlVDRENi:s  VI ;^^^^^^^^        ^ 

169.  Unextinguished  Preihum  on  Debt 

170.  Reserve  for  Accrued  Deprecution ^ 

171.  Reserve  for  Amortization  or  iNTANoiBlE*  Cawtal.V.V.V. ?? 

17J.  Reserve  por  Doubtful  Accounts * 

173.  Insurance  and  Casualty  Reserves.!!]]]!]]]].' l^ 

174.    LUBILTTY   FOR   PROVIDENT  FUNDS ]]J]]]] 

175.  Other  Deferred  Credit  Items...     ^^ 

176.  Surplus  Invested  since  DECEMBER'si]  iViV.Vn  PlanVI'nd  Egui^MEs;*  32 

177.  Surplus  Invested  in  Sinking  Funds »^<iuiPMENT.  32 

178.  Other  Surplus  Reserved ,'.']] ^^ 

179.  Pbofit  akio  Loss— Credit  DALAijCB ^^ 

82 


••J'T'., 


•■■f 


TEXT  PERTAINIXO  TO  ACCOrxTS  TN  THE  BALANCE  SHEET 

STATEMENT. 


1 


100 


Asset  Side. 

PlAWT  AlfO  EgmpiTEifT  TO  Jaruart  1,  1014. 

Jn,  ^".."T?"  °"  .""  "'""'"^sbeet  stntement  should  be  shown  the 
totnl  of  the  b.,lm.ce«  In  the  ledger  ncco.mte  re„resei,tl«g  the  con,„a„v'» 

•  bleb  is  still  In  service  at  tbe  date  of  the  balance  .beet     (See  teit  of 
this  account  on  p.  30.) 


lOL 


Plant  Ann  Eqi;ipiiri«t  smn  Decembeb  31,  1013 

In  this  account  on  the  balnn«-sheet  statement  should  be  shown 
tbe  total  of  the  toilances  In  the  ledger  accounts  representing  the  com- 
imny  s  '"vestment  In  plant  and  equipment  Installed  since  December  31, 
1913.  and  still  In  service  at  the  d.ile  of  tbe  balance  sheet  (For  tbe  plant 
■nd  equipment  primary  accouuts,  see  pp.  35  to  41.) 
102.  CpnsTBt-CTion  Work  iit  rsooREss. 

This  account  should  Include  tbe  amounts  expended  upon  plant  that 
Is  In  process  of  c-onstrnctlon  under  estimates  or  work  orders,  but  Is  not 

interest  charged  during  construction,  also  such  proportion  of  plant 
«.|*rvlslon  ex|«nses.  euglneerlng  expenses,  tool  expenses,  supply  «! 
penses,  ao..tlng  equipment  expenses,  ralUvay  equipment  expenses;  and 

-  !™,  rr."^  ""  °""  *^  """*'■"  '•"'rgeable  to  the  construction 
work  Included  under  this  account.  "eitumou 

When  an.v  project,  the  cost  of  which  bas  been  Included  In  this  account 

IhTI    "l^r  """^  '"  *"■"*•  •"«  ""•»"«  '•""  '""Bed  for  su^Tob 
mZ  n^'T"*"  1°  ""'  """""*•  """  '""^  "PPronrlate  plant  and  ^ulp! 
mem  account  or  other  accounts  should  be  concurreatlr  charged 
•  This  account  should  not  be  used  to  e.xclnde  from  the  planted  equip- 

ment  accounts  property  actually  used  In  operation  which  form"  omS 
a  line  not  completed  In  entirety.  ^ 

103.  In>'estment  Setubitiks. 

This  account  should  Include  the  cost  or  book  value  of  stocks  and  of 
bomls  notes,  and  other  evidences  of  Indebtedness,  having  dat^  of  ma  ur 
«y  of  more  than  one  year  from  date  of  Issue,  held  by  the  alrt, '" 

snmed.  or  held  as  a  means  of  obtaining  or  exercising  control  over  other 

The  amounts  Included  herein  should  be  subdivided  as  (o)  Stocks  of 

STnlrrrand'ti/ri,'"""  "'  '^^'^'^  -Po-^oi  ^  M.^ 
v^  .uuwus  hiocKs,  and  (d)  Miscellaneous  fimded  debt 

(21) 


22 

1€8.  ImrESTMEKT  SECUBiTin — Continued. 

In  stating  this  account  or  tbe  subaccounts  hereof  on  the  balnnce-sbeet 
statement  the  par  value  of  securities  issued  or  assumed  by  the  company 
and  held  by  it,  if  carried  in  this  account  should  be  deducted  in  order 
that  this  account  may  show  only  the  cost  or  book  value  of  securities 
•f  other  companies.     (See  sec  3,  ik  9.) 


I 


NoTB  A. — By  a  Bytiem  corp<»ntUm  Is  meaot  any  controlling,  affiliated, 
trolled,  or  sabsidlary  corporation. 

NoTB  B. — Notes  payable  upon  demand  or  harlnff  date*  of  maturity  of  one  year 
•r  leaa  from  tbe  date  of  issue  should  not  be  Included  herein  but  In  account  Naw 
104.  **  Ix»ns-term  advances  receivable,'*  or  No.  110,  **  Bills  recelTable,"  aa  may  be 
appropriate. 

NoTi  C. — In  the  annual  reports  to  tbe  Commtsston  InvcKtments  In  secnrttlas 
will  be  required  to  be  classified  so  as  to  show  those  held  subject  to  a  lien  of  boom 
diaracter  and  those  held  free  of  Hen,  pledge,  or  oUier  restrictions. 

104.  LoNG-TEBM  Advances  Recuvablb. 

This  account  should  include  advances  to  other  companies,  both  when 
evidenced  by  t>oolc  accounts  nnd  when  evidenced  by  demand  notes,  when 
It  is  mutually  agreed  that  the  accounting  comimny'  sbull  be  reimbursed 
for  such  advances  in  securities  of  the  debtor  company's  issue. 

106.  Miscellaneous  Investments. 

This  account  sliould  include  Investments  of  a  permanent  nature  la 
property,  elttier  tangible  or  Intangible,  other  thnn  that  properly  charge* 
able  to  the  plant  and  equipment  accounts.  This  should  include  such 
items  ns  investments  In  lighting,  water,  and  power  plants,  mnnufucturing 
plants,  lands,  buildings,  and  other  property  not  a  port  of  the  company's 
plant  for  telegraph  or  cable  operations  nor  of  facilities  incident  theretow 

106w  Cash. 

This  account  should  include  the  amount  of  current  funds,  avnilnbia 
for  use  on  demand.  In  tbe  hands  of  flnnncini  officers  nnd  ngents,  or  d»> 
posited  In  banks  or  with  trust  companies;  also  cash  in  transit  for  wldch 
managers  and  agents  receive  current  credit 

107.  Special  Deposits. 

This  account  should  Include  deposits  to  pay  declared  dividends  nnd 
matured  Interest;  cash  realized  from  tbe  Kile  of  securities  nnd  defiosited 
with  trustees  for  disbursement  wben  tlie  purposes  for  wblch  tbe  securi- 
ties are  sold  are  accomplished;  amounts  realised  from  tbe  sale  of  prop- 
erty and  deposited  with  trustees.  In  otber  tlinu  sinking  funds,  until  the 
property  Is  replaced;  special  de|K)sIts  In  otber  than  sinking  funds  for  tbe 
payment  of  debts  and  interest  not  matured;  money  and  securities  de> 
posited  to  secure  tbe  performance  of  contracts;  and  other  deposits  of  a 
special  nature  not  provided  for  elsewhere. 

In  stating  this  account  on  the  balance-sheet  statement  tbe  amount  of 
any  securities  issued  or  assumed  by  tbe  company  nnd  Included  berein 
should  be  deducted  In  order  that  tlie  account  may  show  only  the  assets 
herein  other  than  the  company's  own  securities.    (See  sec.  3,  p.  9.) 

108.  Employees*  Working  Funds. 

This  account  should  Include  amoimts  ad>'anced  to  sufierlntendents, 
managers,  and  otber  officers  and  employees  as  working  funds  from  wiiidi 
certttin  expenditures  are  to  be  made  and  accounted  for. 


^ 


\ 


23 

109.  HaIICITABLB  BBUUtlllES. 

This  account  should  include  the  cost  or  t>oolc  value  of  securities  of 
other  companies  and  (he  par  value  of  securities  Issued  or  assimied  by 
the  accounting  company,  wben  held  in  the  company's  treasury  unpledged 
and  free  for  sale  and  not  necessary  or  desirable  for  tbe  company  to 
bold  for  the  purpose  of  maintaining  the  integrity  of  its  telegraph  or 
cable  system. 

In  stating  this  account  on  tbe  balance-sheet  statement  the  par  value 
of  securities  Issued  or  assumed  by  the  company  and  caiTled  In  this 
account  should  be  deducted.  In  order  that  this  account  shall  show  only  tha 
cost  or  book  value  of  securities  of  other  companies.    (See  sec.  3,  p.  0.) 

UO.  Bills  Receivable. 

This  account  shonid  include  the  cost  of  collectible  obligations  In 
the  form  of  bills  receivable  or  other  similar  evidences  of  money  receivable 
on  demand  or  witliin  a  time  not  exceeding  one  year,  excluding  interest 
coupons. 

NoTB  A. — Notes  having  dates  of  maturity  of  more  than  one  year  after  dste  of 
issue  should  be  Included  in  account  No.  103,  **  Investment  securities  "  or  No.  100, 
**  ilsrketable  securities." 

Nora  B. — When  lains  are  evidenced  by  demand  notes  Intended  later  to  be  ex- 
dinnKed  for  other  securities,  the  amount  of  fiuch  loans  should  be  Included  in  ac- 
count No.  104,  **  L«nf-term  advances  receivable." 

|tl-  Accounts  Receivable  from  Customebs  ano  Agents. 

This  account  should  Include  amounts  due  from  customers  for  services 
rendered  or  billed,  and  from  agents  and  collectors  autborizetl  to  make 
collections  of  operating  revenues.     (See  accounts  Kos.  172  and  304.) 

112.  Accounts  Recefvabt-e  fbom  System  Corporation s. 

This  account  should  include  amounts  due  from  controlling,  affiliated, 
controlled,  or  subsidiary  corporations  on  open  accounts  other  tbnn  those 
provided  for  in  account  No.  104,  **  Long-term  advances  receivable." 

113.  Miscellaneous  Accounts  Receivable. 

This  account  should  include  all  amounts  owing  to  the  company  upon 
accounts  with  solvent  concerns,  otber  than  amounts  provided  for  la 
accounts  Nos.  Ill  and  112;  claims  upon  which  responsibility  Is  acknowl- 
edged by  solvent  concerns  or  which  are  sufficiently  secured  to  be  con- 
sidered good;  nnd  judgments  against  solvent  concerns  where  tbe  judg- 
ment Is  not  appealable  or  suspended  through  appeal. 

Notb. — Cash  on  deposit  in  banks  or  with  trust  companies  should  be  included  in 
account  No.  100,  "  Cash,"  or  No.  107,  "  Special  deposite." 

114.  Matured  Interest  and  Dividends  Receivable. 

This  account  should  Include  interest  accrued  and  due  but  not  yet  col- 
lected  upon   bonds,   notes,   or  otber  commercial   paper   held   by   or   for 
the  l)eneflt  of  tbe  comimny,  and  all  dividends  declared  and  due  from 
•olveut   concerns  but  not  yet  collected,  the  right  to  which   is  in   the 
.  accounting  company. 

115.  Materials  and  Supplies. 

This  account  should  include  the  cost  of  unapplied  material,  including 
material  temporarily  In  use  and  not  charged  out  in  tbe  company's  ac- 
counts, articles  In  firocesH  of  manufacture  by  tbe  company,  fuel  station- 
ery, tools,  and  other  supplies^    Freight  and  express  ciiurges  puid  oo 


J I » 


24 

us.  Matcbtals  and  Sufpum — Continaed. 

materia  I  iDcJuded  In  this  account  sbonld  be  Included  In  the  Talue  of  luch 
mnierial. 

Wben  nny  plant  and  equipment  Is  discontinued,  withdrawn,  or  retired, 
and  wben  any  equipment,  materials,  and  supplies  are  returned  to  store, 
the  salvage  value  thereof  should  be  charged  to  this  account,  regardless 
of  wbether  It  is  to  be  consumed  Id  operation  or  In  construction  or  to  be 
■old.  If  such  value  Is  not  known  and  can  not  readily  be  determined.  It 
should  be  estimated.  Errors  In  such  estimates  wben  determined.  If  made 
during  the  year  In  wblch  the  estimates  were  made,  should  be  adjusted 
through  the  accounts  hivolved ;  If  later,  then  through  the  Profit  and  Loss 
Account. 

Inventories  of  materials  and  supplies  on  hand  and  unapplied  should 
be  taken  at  least  annually,  and  any  shortages  or  overages  disclosed  by 
•uch  Inventories  should  be  credited  or  debited  to  this  account  and  debite«l 
or  credited  to  clearing  account  No.  704,  "  Supply  expense,"  In  case  such 
shortages  or  overages  can  not  be  assigned  to  specific  accounts. 

Note,— Where  discounts  recorercd  thron^h  prompt  pnyment  can  not  be  credited 
to  the  pnrtfciilnr  bills,  guch  materials  and  supplies  should  be  charired  at  the  In- 
voice cost,  and  any  discounts  recovered  through  prompt  payment  of  bills  for  such 
materials  and  supplies  should  be  credited  to  clearlnf  account  No.  704.  -  SuddIv 
expense.'*  '^'^  * 

116.   OniER  CURREWT  ASSETS. 

This  account  should  Include  the  cost  of  all  current  assets  which  ara 
not  Includible  under  any  of  the  foregoing  accounts.  By  current  annrtt 
are  me.int  only  money  or  those  things  that  are  readily  convertible  Into 
money  and  which  are  held  not  as  Investments  but  with  the  Intent  of  being 
presently  converted  Into  money. 

117  Unmatured  Interest.  Dividends,  and  Rents  Receivable. 

This  account  should  Include  interest  on  loans  made;  rents  nnder  leases 
accrued  to  the  date  of  the  balance  sheet,  but  not  due  or  collectible  until 
after  that  date;  dividends  declared  but  not  doe  on  stocks  owned;  and 
dividends  accrued  on  stocks  owned  when  contracts  require  that  the 
dividends  be  paid  at  stated  times. 

118.  Sinking  Fund  Assets. 

This  account  should  Include  the  amount  of  cash,  the  cost  or  book 
Talue  of  live  securities  of  other  companies,  and  other  assets  which  are 
In  the  hands  of  trustees  of  sinking  and  other  funds  for  the  purpose  of 
redeeming  outstanding  obligations;  also  amounts  deposited  with  such 
trustees  on  account  of  mortgaged  property  sold,  and  the  par  value  of 
live  securities  Issued  or  assumed  by  the  accounting  company  and  held 
In  such  funds.    A  separate  account  should  be  kept  for  each  fund. 

In  stating  this  account  on  the  balance-sheet  statement  the  par  value  of 
any  securities  Issued  or  assumed  by  the  company  and  carried  In  this 
account  should  be  deducted  from  the  total  In  order  to  show  only  the 
aswts  in  sinking  funds  other  than  the  company's  own  securities.  (See 
■ec.  3,  p.  9.) 

119.  Insurance  and  Other  Reserve  Fund  Assets. 

This  account  should  include  the  amount  of  cash,  the  cost  or  book  value 
of  securities  of  other  companies,  and  other  assets  In  the  hands  of  tni*. 
tees  or  managers  of  Insurance  and  other  funds  that  have  been  raised 
and  specifically  set  aside  or  Invested  by  the  company  for  specific  pur- 
poses, not  provided  for  elsewhere;  alto  the  par  value  of  aecuritles  issued 


' 


25 

no.  Insurance  and  other  Reserve  Fund  Assets — Continued. 

or  assumed  by  the  accounting  company  and  held  In  such  funds.     A 
sepal  rate  account  should  be  kept  for  each  fund. 

In  stating  this  account  on  the  balance-sheet  statement  the  par  value  of 
any  securities  Issued  or  assumed  by  the  company  and  carried  In  this 
account  should  be  deducted  from  the  total  In  order  to  show  only  the 
assets  In  the  fuuds  other  than  the  company's  own  securities.  (See  sec. 
8,  p.  9.) 

120.  Provident   Fund  Assets. 

This  account  should  Include  the  amount  of  cash,  the  cost  or  book 
value  of  securities  of  other  companies,  and  other  assets,  whether  con- 
tributed by  the  company,  by  employees,  or  by  others.  In  the  hands  of 
trustees  or  managers  of  employees'  i)en.sIon  funds,  savings  funds,  relief, 
hospital,  and  other  assc^iation  funds,  when  such  trustees  or  managers 
are  acting  for  the  company  In  the  administration  of  such  funds;  also 
the  i)ar  value  of  securities  issued  or  assumed  by  the  accouutiug  com- 
pany and  held  in  such  funds. 

Notr. — This  account  should  not  Include  funds  held  by  the  accounting  company 
solely  as  trustee,  and  In  which  It  bus  no  beneflcial  interest. 

121.  Prepaid  Rents. 

This  account  should  Include  the  amount  of  rents  paid  In  advance  of 
the  enjoyment  of  the  term.  As  the  term  is  consumed,  this  account  should 
be  credited  at  monthly  intervals  and  the  appropriate  reut  accouut  should 
be  debited  with  the  amouut  applicable  to  the  month. 

122.  Prepaid  Taxes. 

This  account  should  Include  the  excess  of  taxes  paid  over  the  amount 
properly  chargeable  to  income  or  other  accounts  as  shown  by  the  debit 
balance  In  the  tax  liability  accouut.     (See  sec.  14,  p.  14.) 

123.  Prepaid  Insurance. 

This  account  should  Include  amounts  paid  as  premiums  on  insur- 
ance policies  In  advance  of  their  accrual.  As  such  premiums  accrue, 
they  should  be  credited  at  monthly  iutervals  to  this  accouut  and  charged 
to  accouut  No.  04G,  "Insurance.** 

124.  Other  Prepayments. 

This  account  should  Include  amounts  of  prepayments  made  for  any- 
thing other  than  as  provided  for  lu  the  last  three  i)receding  accounts. 

125.  Unextinguished  Discount  on  Capital  Stock. 

If  the  net  of  the  balances  In  the  discount  and  premium  accounts  for  all 
classes  of  capital  stock  sold  or  exchanged  Is  a  debit  balance,  the  amouut 
shoukl  be  stated  In  this  account.    (See  sec.  4,  p.  10.) 

126.  Unamortized  Debt  Discount  and  Expense. 

If  the  net  of  the  balances  In  the  discount  and  premium  accounts  for  all 
classes  of  funded  del»t  sold  or  exchanged  Is  a  del)It  balance,  the  amouat 
ahould  be  stated  In  this  account    (See  sec.  5,  p.  10.) 

127.  Other  Deferred  Debit   Items. 

This  account  should  Include  suspense  account  debit  balances  that  can 
not  l>e  entirely  cleared  and  dIs{>osed  of  until  additional  Information  is 
receiver!. 

It  should  Include  such  matters  an  amounts  carried  In  suspense  due  to 
extraordinary  casualties  and  unantict|iated  reconxt ruction  (See  sec.  22, 
p.  17) ;  expense  of  preilmliiary  surveys,  plans,  Investigatiomi,  etc..  nisda 


I 


127  OTfnn  DcmtRED  Dcbtt  Ttcmb — Contlnaed. 

for  deternjiniiig  tbe  feiisibility  of  projects  hHd  In  eontemplfltloa:  Itemt 
awolting  adjustment  between  occounts:  debit  bnlances  in  clenring 
accounts:  amounts  to  t>e  sprend  over  a  stated  term  and  not  provl  led  for 
In  other  accounts:  debit  biilnnces  In  openiting  reserves  created  for  r^ 
pairs  of  ocean  cables;  and  otber  similar  items. 

128.  Pbofit  and  I>08S — Debit  BALAitcc. 

Under  this  bend  sbould  be  shown  the  debit  balance,  if  any,  in  tiM 
Profit  and  Loss  Account    (See  sec.  15,  p.  1&) 

LlABIUTT   SlDt. 

ISO.  Capital  Stock. 

This  account  should  Include  the  total  por  value  of  certificates  or 
receipts  actually  or  nominally  issued  to  represent  permnneut  interests  io 
the  accounting  company,  or  interests  which,  if  terminable,  are  so  only  at 
the  option  of  the  coiiiittiny. 

The  amounts  Included  In  this  account  should  be  divided  so  ns  to  show 
(1)  the  pnr  value  of  certificates  Issued  and  actually  outstanding,  t)elng 
those  not  held  by  the  company.  Its  njrents  or  trustees,  or  subject  to  its 
control:  and  (2)  the  pnr  value  of  certificates,  pledged  and  unpledged,  held 
in  the  company's  treasury,  by  Its  ogents  or  trustees,  or  otherwise  subject 
to  Its  control,  including  l>oth  those  reacquired  after  actual  issue  and  those 
nominally  but  never  actually  issued. 

The  amounts  Included  In  this  account  should  be  further  divided  so  aa 
to  show  the  amount  of  each  cinss  of  stock  Issued,  ns  follows: 

(o)  Common  stock. — Stocks  whose  claims  in  the  distribution  of  divi- 
dends nre  subordinnte  to  the  claims  of  all  other  stock. 

(b)  Peeferbed  stock. — Stocks  Imviug  a  prior  claim  upon  such  divi- 
dends ns  may  be  distributed. 

(c)  DcBENTUBB  STOCK. — Stocks  issued  under  a  contract  to  pay  a  speci- 
fied return  nt  sjieclfled  Intervals. 

(d)  ItECEiPTs  OUTSTANDING  FOB  INSTALLMENTS  PAH). — Receipts  for  pay- 
ments on  account  of  subscriptions  to  cniiltnl  stock.  When  certificates  are 
issued  for  n mounts  so  paid,  the  piir  value  should  be  included  In  the 
account  covering  tiie  class  of  stock  for  which  the  certlficntes  are  issued. 

Each  of  the  above  classes  should  be  divided  niso  Into  subclasses  accord- 
ing to  diflTerenees  In  dividend  or  Interest  rights,  voting  rights,  or  con- 
ditions under  which  tbe  securities  mny  be  retired. 

If  any  issue  of  stwk  is  for  money,  that  fact  should  be  stated ;  and  If  for 
any  considenition  other  than  money,  the  person  to  whom  Issued  should 
be  designated,  and  the  consideration  for  which  issued  should  be  described 
with  sutticlent  particularity  to  Identify  it.  If  such  Issue  Is  to  the 
treasurer  or  other  agent  of  the  comimny.  to  be  by  him  dlsiM)sed  of  for  tlie 
benefit  of  the  company,  tliat  fact  and  the  name  of  such  agent  should  ba 
shown:  and  such  ngent  sbould.  In  his  account  of  the  disftositlon  thereof, 
show  the  like  details  concerning  the  considenition  realized  thcreuu.  If 
tbe  fair  cash  value  of  the  consi<leration  realized  is  greater  or  less  tbnn 
the  par  value,  the  diflTerence  creilited  or  charged  to  an  appropriate  dis- 
count and  premium  account  should  have  reference  made  to  it  in  the 
entry  in  the  stock  account.     (See  sec.  4.  p.  10.) 

In  stating  this  account  on  the  balance-sheet  stntement.  the  amount 
held  by  the  c<unpany.  Its  agents  or  trustees,  or  subject  to  Its  control, 
should  be  deducted  from  the  total  in  order  to  show  only  the  par  value 


i 


27 

180.  CAPFTAt  Stock — Continued. 

of  the  certificates  actually  outstanding  at  the  date  of  the  balance-sheet 
statement     (See  sec.  3.  p.  0.) 

NoTS  A. — For  the  purposes  of  the  bn lance-sheet  statement,  capital  stock  ts 
considered  nominally  Ueued  when  certificates  are  signed  and  seated  and  placed 
wttb  tbe  proper  officer  for  sale  and  delivery,  or  pledged,  or  otherwise  placed  In 
some  special  fund  of  the  accounting  company.  It  is  considered  to  be  actualtp 
Uttued  when  it  has  been  sold  to  a  bona  fide  purchaser  for  a  raluable  consideration, 
and  such  purchaser  holds  It  free  from  all  control  by  the  accounting  company.  All 
capital  stock  actually  issued  and  not  reacquired  by  or  for  tbe  accounting  corn- 
puny  la  considered  to  t>e  actuall§  outstandinu.  If  reacquired  and  held  by  or  for 
the  accounting  company  under  such  circumstances  as  require  It  to  t>e  considered  as 
held  alive  and  not  canceled  or  retired,  it  is  considered  to  be  nominally  ouisianding. 

NuTB  B. — When  a  genenil  levy  or  assessment  Is  made  against  the  holders  of 
eipital  stock,  requiring  the  payment  of  any  sum  for  the  use  of  the  company  In 
addition  to  the  consideration  agreed  upon  at  the  time  of  sale,  the  amount  col- 
lected upon  such  levy  or  assessment  should  t>e  credited  to  the  discount  and 
premium  account  for  the  class  of  stock  on  which  the  assessment  is  made. 

IfiL  Stock  Liability  fob  Convebsion  of  Secubities. 

This  account  should  include  the  par  value  of  stock  that  the  company 
has  agreed  to  issue  In  exchange  for  securities  of  constituent  companies 
whose  physical  property  has  been  acquired  under  such  agreements,  but 
whose  securities  tiave  not  yet  been  surrendered  for  exchange. 

102.  Pbemiumb  on  Capital  Stock. 

If  the  net  of  the  balances  in  the  discount  and  premium  accounts  for 
all  classes  of  capital  stock  sold  or  exchanged  is  a  credit  balance,  the 
amount  should  be  stated  in  this  account    (See  sec  4,  p.  10.) 

15S.  Gbants  in  Am  of  Constbuction. 

This  account  should  include  tbe  amounts  of  grants  by  individuals, 
associations,  corporations,  governments,  or  others  as  contributions  to  the 
cost  of  construction,  additions,  or  betterments. 

IM.  FUNDEn  Debt. 

This  account  should  include  the  total  par  value  of  unmatured  funded 
debt  mnturing  more  than  one  year  from  date  of  issue,  issued  by  the 
accounting  comiiany  and  not  retired  or  canceled,  and  the  total  par  value 
of  similar  unmatured  debt  of  other  companies  the  payment  of  which  has 
been  assumed  by  the  accounting  company. 

The  amounts  Included  in  this  account  sbould  be  divided  so  as  to  show 
(1)  the  par  value  of  certificates  or  other  evidences  of  funded  debt  issued 
and  actually  outstanding.  t>eing  those  not  held  by  the  company,  its  agents 
or  trustees,  or  subject  to  its  control ;  and  (2)  the  par  value  of  certificates 
or  other  evidences  of  funded  debt,  pledged  and  unpledged,  held  in  the 
company's  treasury,  by  its  agents  or  trustees,  or  otherwise  subject  to  its 
control.  Including  both  those  reacquired  after  actual  issue  and  those 
nominally  but  never  nctuaily  issued. 

The  amounts  Included  in  this  account  should  be  further  divided  so  as  to 
show  the  amount  of  each  class  of  funded  debt,  as  follows: 

(a)  MoBTGAGE  BONDS. — Rouds  sccurcd  by  a  lien  on  physical  property 
and  not  includible  in  the  other  subdivisions  of  this  account 

(b)  CoiJ^ATERAL  TRUST  BONDS. — Rouds  oud  uotcs  having  a  date  of  ma- 
turity of  more  than  one  j*ejir  nfter  date  of  issue,  secured  by  a  lien  on 
securities  or  other  commercial  paper;  also  stock  trust  certificates  Himliar 
Id  character  to  collateral  trust  bonds. 

(c)  Income  bonds. — Bonds  w^hlch  are  a  lien  on  a  company's  revenue 
alone,  or  txmds  which,  while  being  a  lien  on  its  property  and  franchises, 
can  claim  payment  of  interest  only  in  case  interest  is  earned. 


ill 


i 


liili 


28 

154.  FnifDED  Debt — Contlnnedt 

((/)  MisccLLANKous  oRLTQATTOifs. — All  funded  obllfnitlons  not  provided, 
for  bj  tlie  otber  subdivisions  of  tbis  nccount.  also  notes,  unsecured  cer- 
tSficutes  of  indebtedness,  debenture  bonds,  plain  bonds,  reul  estiite  mort- 
gages executed  or  ossumed,  aind  otber  sUuil&r  obligutioos  luuturiug  iiiort 
tban  one  year  after  date  of  Issue. 

(e)  Receipts  outstawdiiio  for  ruwDFD  debt. — Receipts  for  pnjnienta 
on  account  of  funded  debt.  When  certifloites  are  issued  for  amounts  ao 
pnid.  the  par  value  should  be  included  in  the  account  covering  the  class 
of  funded  debt  for  which  the  certificates  are  issued. 

Eitch  of  the  above  classes  should  be  divided  also  Into  subctnsKes  ac- 
cording to  diflTerenccs  in  mortgage  or  other  lien  or  security  therefor,  rat* 
of  interest,  interest  dates,  or  date  of  maturity.  Parts  of  any  issue 
agreeing  in  other  characteristics  but  maturing  serially  may  be  treoted 
as  of  the  same  subclass. 

If  the  consideration  received  for  any  Issne  of  funded  debt  is  anything 
else  than  money,  the  entry  should  show  the  principal  to  whom  issued 
and  should  describe  the  considenitlon  actually  received  for  (he  Issue 
with  sufficient  particularity  to  Identify  It.  If  the  issue  Is  In  any  case  to 
an  agent  of  an  undisclosed  principal,  the  name  and  business  address  of 
such  agent  and  the  fact  of  his  agency  should  be  shown  In  the  entry.  If 
the  fair  cash  value  of  the  consideration  realized  is  greater  or  less  than 
the  par  value  plus  the  accrued  interest,  the  difference  credited  or  charged 
to  an  appropriate  discount  and  premium  account  should  have  reference 
made  to  It  In  the  fundied  debt  account.     (See  sec.  5,  p.  10.) 

In  stating  this  account  on  the  balance-sheet  statement,  the  amonnt 
held  by  the  company,  its  agents  or  trustees,  or  subject  to  Its  control 
■hould  be  deducted  from  the  total  in  order  to  show  only  the  fiar  value  of 
funded  debt  securities  actually  outstanding  at  the  date  of  the  bulance- 
sheet  statement.     (See  sec.  3,  p.  0.) 

Note. — For  the  purposes  of  the  balance-sheet  statement,  funded  debt  securl- 
tlen  are  considered  to  be  nominully  itaued  when  certified  by  trustees  nod  placed 
with  the  proper  officer  for  sale  and  delivery,  or  pledged,  or  otherwise  placed  la 
some  special  fund  of  the  accounting  company.  They  are  considered  to  lie  actu- 
ally iMtued  when  they  have  been  sold  to  a  bona  flde  purchaser  for  a  ralunlile  con- 
sideration, snd  such  purchaser  holds  them  free  from  all  control  by  the  accnimflng 
company.  All  fuuded  debt  securities  actually  Issued  and  not  reacquired  and  held 
by  or  for  the  accounting  company  are  considered  to  t>e  actuaUy  ouUtandiny.  If  re- 
acquired by  or  for  the  accoiintinx  company  under  such  circumstances  aa  requlrt 
them  to  l)e  considered  ns  held  alive  and  not  canceled  or  retired,  they  are  consld* 
ered  aomi«o/iy  ouUtanding. 

155.  Receiver's  Certificates. 

When  any  receiver  acting  under  the  orders  of  a  court  of  competent 
Jurisdiction  is  In  possession  of  the  property  of  the  conifmny  and  under 
the  orders  of  such  court  Issues  certiflcntes  of  Indebtedness  chnrgonhle 
upon  such  property,  the  par  value  of  such  certificates  should  l»e  cre«llied 
to  this  account.  Interest  accruing  upon  such  certificates  should  also  ba 
credited  monthly  to  this  account,  and  when  paid  should  be  char:;ed  to 
this  account. 

150.  Long-term  Advances  Payable. 

This  account  should  Include  ad%*aDces  from  other  compnnleii,  both 
when  evidenced  by  l>ook  accounts  and  when  evidenced  by  demand  notes, 
when  it  Is  mutually  agree<l  that  such  companies  shall  l)e  reimbursed 
for  such  advances  in  securities  of  the  accoimting  company's  Issue. 


■ 

I 


29 

157.  J17DOMENT8   UlTFATD. 

When  any  judgment  of  Indebtedness  Is  renderco  agnlnst  the  company 
by  a  court  of  competent  Jurisdiction,  or  any  flue  or  penalty  requiring  the 
payment  of  money  is  assessed  against  the  company  by  such  a  court,  and 
no  ap[»enl  accomitanied  by  stay  of  execution  has  been  taken  therefrom 
within  the  time  allowed  by  law  for  such  appeal,  the  amount  of  such  judg> 
*  nient,  fine,  or  penalty,  should  be  credited  to  this  account,  and  the  entry 

•bould  designate  the  action  or  suit  as  a  consequence  of  which  such  Judg- 
ment Is  pronounced  or  such  flue  or  penalty  assessed.  The  designation 
of  the  action  or  suit  should  Indicate  the  court,  the  term  thereof,  the 
parties,  and  the  character  of  the  action  or  suit  Interest  accruing  upon 
any  such  Judgment  should  be  credited  to  tbis  account. 

In  case  of  appeal  and  affirmance  In  whole  or  In  part  from  which  Judg- 
ment  of  affirmance  a  further  appeal  lies»  tiie  same  rule  shall  apply  as 
uix>n  entry  of  original  Judgment 

158.  Bills  Payable. 

This  account  should  include  the  par  value  of  all  notes,  drafts,  and 
other  evidences  of  Indebtedness,  issued  or  assumed  by  the  company,  and 
payable  on  demand  or  within  a  time  not  exceeding  one  year. 

Noxr. — VThen  loans  from  other  companies  are  evidenced  by  demand  notes  In- 
tended later  to  be  excbantfed  for  other  securities,  the  amount  of  such  loans  should 
be  Included  In  account  No.  15U,  **  Long-term  advances  payable." 

150.  Audited  Vouchers  and  Wages  Unpaid. 

This  account  should  include  the  amount  of  audited  vouchers  or  accounts 
and  audited  pay  rolls  unpaid  on  the  date  of  the  balance  sheet;  also  the 
omount  of  unclaimed  wages  and  outstanding  pay  and  time  checks  issued 
in  iMiymeut  of  wages. 

100.  Customers*  Deposits. 

This  account  should  Include  nil  cash  deposited  with  the  company  by 
customers  as  security  for  the  [uiyment  of  bills.  Deposits  refunded  should 
be  charged  to  this  account  and  credited  to  cash.  Deposits  applied  to 
uncollectible  telegraph  or  cable  bills  should  be  charged  to  this  account 
and  credited  to  the  account  of  the  customer. 

Kots. — ^Thls  account  is  not  Intended  to  cover  small  amounts  deposited  by 
■rnders  of  collect  messages  as  gunrnnty  in  case  charges  can  not  be  collected  at 
dvstlnulion,  such  amounts  being  usually  refunded  or  applied  within  a  short  time. 

161.  Accounts  Payable  to  System  Corporations. 

This  account  should  Include  the  amounts  owed  to  controlling,  affiliated, 
controlled  or  subsidiary  corfMrations  on  open  accomits,  other  than  thosa 
provided  for  in  account  No.  15G,  **  Long-term  advances  payable.** 

1G2.  Miscellaneous  Accounts  Payable. 

This  account  should  Include  all  amounts  owed  to  miscellaneous  credi- 
tors on  oi>eu  accounts  and  n^t  provided  for  elsewhere. 

163.  Matured  Interest,  Dividends,  and  Rents  Unpaid. 

lliis  account  should  Include  matured  and  unpaid  interest  on  funded 
debt  loans,  and  debenture  stock  of  the  accounting  company,  and  of  other 
companies  when  payment  has  been  assumed  by  the  company;  rents  due 
and  unpaid  for  property  held  under  leases;  and  dividends  due  and  pay- 
able on  capital  stock  but  impaid«  uncalled  for,  or  unclaimed  at  the  data 
of  the  balance  sheet 


^  !S 


!■ 


lii^ 


i 


1(1      t 


30 

104.  Matured  Funded  Debt  Unpaid. 

This  account  should  Include  the  amount  of  mntured  mortgnge,  bonded, 
and  other  funded  debt  payable,  but  not  yet  paid,  including  bonds  drnwo 
for  redemption  through  the  operaUon  of  sinl^ing  and  redempUon  fund 
agreements. 

165.  Sebvicb  Billed  in  Advance. 

This  account  should  include  the  amounts  covering  time  service  and 
other  services  which  are  billed  in  advance.  As  the  service  is  performed 
this  account  should  be  charged  and  the  appropriate  revenue  account 
should  be  credited. 

166.  0th EB  Current  Liabilitie8. 

This  account  should  include  the  amounts  of  all  current  llabilitlea  which 
are  not  included  in  any  of  the  foregoing  accounts. 

167.  Taxes  Accrued. 

This  account  should  Include  the  amount  of  taxes  accrued  and  properly 
charged  against  Income  or  other  accounts  In  excess  of  the  amount  of 
taxes  paid.     (See  sec.  14,  p.  14.) 

ICa  Unmatured  Interest,  Dividends,  and  Rents  Patablc 

This  account  should  Include  the  amount  of  interest  accrued  but  not  due 
on  funded  debt  issued  or  assumed,  loans,  and  open  accounts;  and  renta 
under  leases  accrued  to  the  date  for  which  the  bahince  sheet  is  made  but 
not  due  until  after  that  date;  also  dividends  declared  on  stock  prior  to 
the  date  of  the  balance  sheet  but  not  payable  until  after  that  date. 

Not*. — The  Interest  accnilns  on  any  Judgments  apalnst  the  company  or  npon 
any  recelvor'a  certlflcntea  ahould  be  credited  to  the  account  to  which  such  Judg^ 
ments  or  receiver's  certificates  stand  credited. 

168.  Unextinguished  Premium  on  Debt. 

If  the  net  of  the  balances  in  the  discount  and  premium  accounts  for 
all  classes  of  funded  debt  sold  or  exchanged  is  a  credit  balance,  the 
amount  should  be  stated  In  this  account    (See  sec.  6,  p.  10.) 

170.  Reserve  for  Accrued  Depreciation. 

To  this  account  should  be  credited  such  amounts  as  are  concurrently 
charged  to  operating  expense  account  No.  COS,  "  Depreciation  of  plant  and 
equipment,"  and  to  clearing  accounts  Nos.  701,  702.  703.  708,  and  709.  to 
cover  the  expense  of  depreciation  of  plant,  equipment,  furniture,  tools, 
and  Implements.  To  this  account  should  also  be  credited  any  amount 
carrle<l  In  reserve  on  January  1,  1014,  to  cover  the  expense  of  depreclatloo 
on  plant,  equipment,  furniture,  tools,  and  implemenu  installed  prior  to 
that  date. 

To  this  account  should  be  charged,  when  tangible  plant  and  equipment 
installed  since  December  31,  1913,  Is  relinquished,  retired,  or  destroyed, 
the  realized  depreciation  thereof;  also  the  amount  of  depreciation  cor 
rled  In  this  account  In  respect  of  tangible  plant  and  equipment  Installed 
prior  to  January  1,  1914,  when  such  property  is  relinquished,  retired, 
or  destroyed.    (See  sees.  12,  p.  13,  and  21,  p.  10.) 

To  this  account  should  be  charged  also  such  part  of  the  expenditure! 
for  extraordinary  repairs  concurrently  credited  to  account  No.  Cll, 
••Repairs  charged  to  reserves — Cr.,"  as  may  have  been  provided  for  In 
estimating  the  rate  of  depreciation.     (See  sec.  19.  p.  15.) 

If  depreciation  Is  accrued  on  leased  plant  and  equipment,  this  acconnt 
ihould  be  subdivided  Into  (a)  Reserve  for  accrued  depreciation,  and  (5) 
Reaenre  for  accrued  depreciation  of  leased  plant  and  equipment 


I 


it 


31 

ITL  RniETK  poK  Amobtixation  op  Intanoiblk  Capital. 

To  this  account  should  be  credited  such  amounts  as  are  charged  to 
account  No.  414,  ''Amortization  unprovided  for  elsewhere,**  and  account 
No.  652,  ''Amortization  of  franchises  and  patents,"  to  provide  a  reserve 
for  intangible  capital.  The  amounts  charged  to  account  No.  (X)2  and 
credited  to  this  account  should  be  based  upon  a  rule  determined  by 
the  accounting  company,  the  purpose  and  elTect  of  such  rule  being  to 
accumulate  by  charges  equitably  distributed  throughout  the  life  of  any 
franchise  or  patent  a  reserve  that  will  at  the  expiration  of  its  life  equal 
the  original  cost 

Nora. — When  any  franchise,  patent  or  other  Intansrihle  capital  expires  or  t« 
otherwise  retired  from  service  (as,  for  example,  through  sale),  (1)  the  account 
•rl)rinall7  charged  therewith  should  he  credited  with  the  amount  orl;,'inally 
charged:  (2)  this  account  should  be  debited  with  all  amounts  theretofore  credited 
In  respect  of  such  capital  goln?  out  of  service;  (3)  the  appropriate  account 
■bouid  be  debited  with  the  proceeds  of  sale.  If  any,  and  (4)  any  necessary  adjust- 
ment should  be  made  by  charging  account  No.  414.  "Amortisation  unprovided  for 
elsewhere,"  or  crediting  account  No.  401,  "Miscellaneous  crediU,"  as  may  ba 
appropriate. 

172.  Reserve  fob  Doubtful  Accounts. 

To  this  account  should  be  credited  such  amounts  as  may  be  concuirently 
Charged  to  account  No.  304,  "Uncollectible  operating  revenues,"  to  pro- 
vide a  reserve  for  doubtful  accounts.  If  such  reserve  is  provided, 
when  any  bill  for  service  has  proved  impracticable  of  collection,  this 
account-  should  be  charged  and  the  account  in  which  the  bill  is  carried 
ahould  be  credited. 

173.  Insurance  and  Casualty  Rfjserves. 

This  account  should  include  any  specific  appropriation  of  income  oP 
surplus  and  such  amounts  as  are  concurrently  charged  to  account  No. 
WO,  "Insurance,**  to  cover  self-carried  risks  on  Are,  fidelity,  boiler, 
casualty,  burglar,  and  other  self-carried  Insurance.  To  this  account 
ahould  be  charged  the  proper  proportions  of  losses  realized  on  items 
protected  by  such  self-carried  insurance. 

When  any  admitted  liability  arises  because  of  loss  or  damage  to 
the  property  of  others  or  because  of  Injuries  to  employees  or  other 
persons,  and  Is  not  previously  provided  for  by  insurance  or  self-Insurance, 
the  amount  of  the  liability  may  be  charged  to  the  appropriate  operating 
expense  or  other  accounts  and  credited  to  this  account  against  which,  in 
such  case,  the  actual  cost  of  satisfaction  of  the  liability  should  be  charged 
when  determined.  If  the  extent  of  the  liability  can  not  be  known  im- 
mediately an  estimate  may  be  charged  as  stated,  adjustment  being  made 
when  the  extent  of  the  liability  Is  definitely  ascertained.  If  the  loss  is 
of  such  character  that  it  Is  In  whole  or  in  part  indemnifiable  under  any 
contract  of  insurance  carried  by  the  company,  the  indemnifiable  iK)rtlon 
of  the  loss  should  be  charged  to  the  insurer  and  credited  to  this  account 

t74.  LiABiLiTT  Foa  Provident  Funds. 

This  account  should  Include  any  specific  appropriations  of  Income  or 
■uritlus  and  such  amounts  as  are  charged  to  account  No.  049,  "  Relief 
department  and  pensions,"  to  provide  for  pension,  benefit,  and  .other 
provident  payments. 

This  account  should  Include  also  the  ledger  balances  covering  the 
amount  of  cash  and  the  cost  or  book  value  of  securities  and  other  assets 
(whether  contributed  by  the  company,  by  employees,  or  by  others)  in  the 
handa  of  trustees  or  managara  of  employees'  pension  funds,  savings  fuud% 


i'l 


lilt' 


li 


',1' 


fid 


l-» 


ill 


ill 


i  I; 


1 

f -1 


32 

174.  LlABTLITT  FC»  PROTTDCIfT  PUND8—Con tinned. 

relief,  hospirnl.  and  other  flswciiitlon  funds,  when  inch  tnintees  or  mnn. 
•gers  nre  ncting  for  the  conipnny  In  the  odnilulstrntlon  of  such  fund*- 
Also  the  amount  of  such  funds  held  to  the  comimny's  treasury. 

•el^iZl"  •*^"r'  "''**"'*'  "***  '"*"'"***  """"  ropn^^Unt:  fun*.  In  which  tht 
aeeountinc  company  ha.  no  bencfleUI  hitercst  and  wblcb  it  bold,  purelj  a.  Ituulll 

175.  Other  Deferbed  Cbroit  Items. 

This  account  should  Include  suspense  account  credit  balances  that 
can  not  be  entirely  cleared  and  di8|K>sed  of  until  additional  Infoni.atlon 
18  received.  It  should  Include  such  mutters  as  credit  bailuuces  In  o|.eniilnff 
reserves  created  for  re|«ilrs  of  ocemi  caible  lines;  Items  awaiting  «dJ^s^ 
nieiit  between  accounts;  credit  balances  In  clearing  accounts;  amounts 
to  be  spread  over  a  stated  term  and  not  provided  for  elsewhere;  and 
other  similar  Itema  «?.  ««u 

17a  Surplus  Invested  since  December  31.  1013.  iw  Plant  and  Equipment 

This  account  should  Include  such  amounts  of  Income  and  surplus  •■ 
have  been  definitely  appro|.rlated  or  set  aside  ami  expended  since  Decern- 
ber  31.  1913.  for  extensions  or  Improvements  of  the  compnny's  pl.int  and 
equipment,  such  apf.roprh.tlons  to  Include  those  made  for  the  purpose  of 
discharging  the  princliwl  (less  the  discount.  If  nny.  sundered  at  the  time  of 
sale)  of  obligations  Incurred  in  the  acquisition  of  any  property  whose 
cost  Is  carried  In  the  plant  and  equipment  accounts.. 

Nora  A.—The  amounts  credited  to  this  account  should  be  concurrently  chanred 
to  ncc.>un  No.  :m.  "Ar^pruprUtlon^  of  Income  for  construction,  e^pmen,  ?^ 
rnd'u:tre;m:n:«..^"  '''•  "•^'^''-P^'""-  o'  -P-  'or  const ruct:::n/egu.pme„\' 

.cn7,^Mo''*~r'*^"  "*^"".^  "**'*""'  "**'  '"*''"*'*  temporary  appropriations  for  tba 
acquisition  of  property  the  co-t  of  which  Is  Intended  Infer  lo  be  met  bv  an  Isiu! 
of  ^ocurlties.  n«r  approprlntlon.  for  the  payment  of  obligation,  which  are  i^ 
tended  to  be  replaced  by  new  Issues. 

177.  Surplus  Invested  in  Sinking  Funds. 

This  account  should  Include  aiM>ropriatlon8  of  Income  and  surplus  that 
■re  specifically  Invested  or  set  aside  in  the  hands  of  trustees  for  slukinf 
and  redemption  funds,  and  also  accretions  to  such  funds. 

178.  Other  Surplus  Reserved. 

This  account  should  Include  all  appropriations  of  Income  and  surplut 
held  In  reserve,  other  than  appropriations  Invested  since  Deceml>er  31, 
1»13,  In  plant  and  equipment  and  those  Invested  In  sinking  funds  A 
■eiMirate  subaccount  should  be  nilsed  for  each  reserve,  and  the  entriei 
In  such  subaiccounts  are  required  to  be  shown  separately  in  the  annual 
report  to  the  Commission. 

This  account  should  Include  the  unexpended  balance.  If  any,  of  appro- 
priations Intended  to  be  Invested  in  plant  and  equipment,  and  such 
appropriations  to  sinking  or  redemption  fund  reserves  as  are  not  specill- 
caily  Invested. 

179.  Profit  and  Ijosb — CREDrr  Balance. 

Under  this  head  should  be  shown  the  credit  balance,  If  any,  In  the 
Profit  and  Loss  Account.    (See  sec  16,  j^  15.) 


PLANT  AND  EQUIPMENT  ACCOUNTS. 

GENERAL  ACCOUNTS. 

Pac*. 

100.  Plant  and  Equipment  to  Jajtuart  1, 1914 35 

101.  Plant  and  Equipment  since  December  31,  1913 35 

PRIMARY  ACCOUNTS. 

200.  Organization 36 

201.  Franchises 35 

202.  Patent  Rights 36 

203.  Other  Intangible  Capftal 36 

204.  Right  op  Way 36 

205.  Land 36 

206.  Buildings 37 

207.  Telegraph  Equipment 37 

208.  Messenger  Equipment 38 

209.  Other  Equipment  op  Telegraph  Offices 38 

210.  Subscribers'  Equipment 38 

211 .  Pole  Lines 33 

212.  Aerlal  Cable 38 

213.  Aerial  Wire 38 

214.  Underground  Conduits 38 

215.  Underground  Cable 38 

216.  Submarine  Telegraph  Cable 38 

217.  Pneumatic  Tubes 39 

218.  Floating  Equipment 39 

219.  Railway  Equipment 39 

220.  Cable  Equipment 39 

221.  Other  Equipment  op  Cable  Offices 39 

222.  Cable  Lines 39 

223.  Cable  Floating  Equipment 39 

224.  Oppice  FuRNrruRE  and  Fixtures 39 

225.  General  Shop  Equipment 40 

226.  General  Store  Equipment 40 

227.  General  Stable  and  Garage  Equipment 40 

228.  General  Tools  and  Implements 40 

229.  Interest  During  Construction 40 

230.  Undistributed  Engineering  and  Superintendence 41 

231.  Undistributed  Law  Expenditures 41 

232.  Taxes  During  Construction 41 

233.  Miscellaneous  Construction  Expenditures 41 

(33) 
65922'— 13 3 


I! 


U,:^i 


TEXT  PERTAINING  TO  ACCOUNTS  FOR  INVESTMENT  IN  PLANT  AND 

EQUIPMENT. 


lOD.  PLANT  AND  EQUIPMENT  TO  JANUARY  1,  1914. 

This  general  account  is  a  suniniary  of  those  booh:  accounts  which  in- 
clude the  plant  and  equiimient  of  the  company  installea  prior  to  January 
1,  1914,  and  which  is  still  in  service  at  the  date  of  the  balance  sheet. 

The  accounts  representing  the  plant  and  equipment  of  the  company  as 
carried  on  its  books  at  the  close  of  December  31,  1913,  should  be  so  desig- 
natetl  upon  the  books  of  the  company  as  to  show  clearly  that  they  relate 
only  to  plant  and  equipment  installed  prior  to  the  close  of  that  date.  (See 
•ec.  7,  p.  11.) 

Note  A. — No  debits  should  be  made  to  such  accounts  with  respect  to  any  prop- 
erty acquired  subsequent  to  December  31,  1913,  but  the  cost  of  such  property 
should  t>e  charged  to  primary  accounts  Nos.  200  to  233. 

Note  B. — In  the  reports  to  the  Commission  a  statement  will  be  required  show- 
ing the  names  of  the  plant  and  equipment  accounts  actually  carried  by  the  com- 
pany on  December  31,  1913,  and  the  balances  therein  at  the  date  of  the  report. 

101.  PLANT  AND  EQUIPMENT  SINCE  DECEMBER  31,  1913. 

This  general  account  is  a  summary  of  primary  accounts  Nos.  200  to 
233,  Inclusive,  which  include  the  investment  in  plant  and  equipment  in- 
stalled since  December  31,  1913.  The  sum  of  the  balances  in  accounts 
Nos.  200  to  233,  inclusive,  as  provided  hereinafter,  should  be  shown  on 
the  balance-sheet  statement  under  this  account     (See  sec.  7,  p.  11.) 

200.  Obqamzation. 

This  account  should  Include  all  fees  paid  to  governments  for  the 
privilege  of  Incorporation,  and  all  office  and  other  expenditures  incident 
to  organizing  the  company  or  other  enterprise  and  putting  it  In  readiness 
to  do  business.  This  Includes  the  cost  of  preparing  and  distributing 
prospectuses,  the  cost  of  soliciting  subscriptions  for  stock,  cash  fees  paid 
to  promoters,  actual  cash  value,  at  the  time  of  organization,  of  securities 
paid  to  promoters  for  their  services  in  organizing  the  enterprise,  counsel 
fees,  cost  of  preparing  and  issuing  certificates  of  stock,  cost  of  procuring 
certificates  of  necessity  from  State  authorities,  and  other  like  costs. 
(See  account  No.  414,  p.  54.) 

NoTB. — The  cost  of  soliciting  for  loans  or  for  purchase  of  bonds  or  other  eyl- 
dences  of  indebtedness  should  not  be  charged  to  this  account. 

201.  Franchises. 

This  account  should  Include  the  amount  (exclusive  of  any  tax  or 
annual  charge)  actually  paid  to  governments  as  the  consideration  for 
the  grant  of  such  franchise  or  right  having  a  life  of  more  than  one  year 
as  Is  necessary  to  the  conduct  of  the  company's  telegraph  or  cable  opera- 
tions, or  for  the  extension  of  such  franchise.  If  any  such  franchise  Is 
acquired  by  assignment,  the  charge  to  this  account  In  respect  thereof 

(35) 


tl 


Hi  ' 


!lt 


!:!■    1.JK 


li 


36 

201.  Franchises — Continued. 

must  not  exceed  the  amount  actually  paid  therefor  by  the  company  to 
Its  assignor  nor  should  It  exceed  the  amount  actually  paid  the  Govern- 
ment.     (See  account  No.  652,  p.  71.) 

NOTB  A.— Annual  or  more  frequent  payments  In  respect  of  franchises  should  be 
charged  to  the  appropriate  tax  or  operating  expense  account. 

Note  B.— Any  excess  of  the  amount  actually  paid  by  the  company  over  the 
amount  paid  by  the  original  grantee  to  the  grantor  of  the  franchise  should  be 
charged  to  account  No.  203,  "  Other  intangible  capital."  if  any  franchise  has  a 
life  of  not  more  than  one  year  after  the  date  when  It  is  first  exercised  by  the  com- 
pany, the  cost  of  the  franchise  should  not  be  charged  to  this  account,  but  to  the 
appropriate  operating  expense  accounts  or,  if  extending  beyond  the  fiscal  year,  to 
account  No.  124,  "  Other  prepayments." 

202.  Patent  Rights. 

This  account  should  Include  the  cost  of  all  rights  having  a  life  of 
more  than  one  year  from  the  date  when  placed  In  service  acquired  by 
the  company  in  or  under  valid  patents  granted  by  governments  to  in- 
ventors for  inventions  and  discoveries  in  connection  with  conducting 
telegraph  or  cable  operations.     (See  account  No.  652,  p.  71.) 

203.  Otheb  Intawgible  Capital. 

This  account  should  include  the  cost  of  all  property,  not  covered  by 
the  last  three  preceding  accounts,  coming  within  the  definition  of  in- 
tangible capital  and  devoted  to  telegraph  or  cable  operations.  Entries 
of  charges  to  this  account  should  describe  the  acquired  property  with 
sufficient  particularity  clearly  to  identify  It,  and  should  also  show  specifi- 
cally the  principal  from  whom  acquired  and  all  agents  representing  such 
principal  in  the  transaction ;  also  the  term  of  life  of  such  property,  esti- 
mated, if  not  known,  and,  if  estimated,  the  facts  upon  which  the  estimate 
Is  based.    (See  account  No.  414,  p.  54.) 

204.  Right  of  Wat. 

This  account  should  Include  the  cost  of  aU  land  and  Interests  In  land 
acquired  for  the  location  of  wires,  cables,  pole  lines,  and  conduits; 
salaries  and  expenses  of  purchasing  agents;  expenses  of  appraisals  and 
of  juries,  commissioners,  or  arbitrators  In  condemnation  cases;  notarial 
fees,  real-estate  brokers'  commissions;  cost  of  plats,  abstracts,  exami- 
nation of  tiUe,  recording  deeds,  etc. ;  and  cost  of  assessmente  for  public 
improvements  which  are  not  the  property  of  the  accounting  company. 

This  account  should  also  include  the  first  cost  of  acquiring  leaseholds 
of  land  for  right  of  way,  the  terms  of  which  are  for  more  than  one  year 
each,  whether  acquired  through  direct  lease,  assignment,  or  otherwise. 
If  any  such  leasehold  is  acquired  by  assignment,  the  charge  to  this  ac 
count  must  not  exceed  the  amount  actually  paid  therefor  by  the  account- 
ing company  to  the  assignor. 

206.  Land. 

This  account  should  include  the  cost  of  all  land  and  Interests  in  land, 
other  than  right  of  way,  acquired  for  use  In  the  operation  of  the  telepniph 
or  cable  plant,  such  as  land  occupied  by  general  and  division  oflSces, 
main,  local,  branch,  or  relay  telegraph  or  cable  offices,  shops,  storehouses, 
stables,  and  garages.  It  includes  the  cost  of  examination  and  registration 
of  tiUe,  conveyancer's  and  notary's  fees,  purchasing  agent's  commissions 
or  proportion  of  purchasing  agent's  salary,  taxes  accrued  to  date  of  trans- 
fer  of  title,  and  all  Hens  upon  the  title,  when  such  costs  are  assumed  or 
paid  by  the  purchaser  In  Its  own  behalf;  cost  of  anMsments  for  public 
Improvements  which  add  to  the  value  of  the  lands  but  which  are  not  th« 


37 

206.  Land — Continued. 

property  of  the  accounting  company,  including  sidewalks  on  public  prop- 
erty; cost  of  grading  land  when  not  done  in  connection  with  buildings; 
costs  of  obtaining  consents  and  payments  for  abutting  damages;  and 
expenses  of  condemnation  proceedings. 

This  account  should  also  Include  the  first  cost  of  acquiring  leaseholds 
of  land,  other  than  for  right  of  way,  the  terms  of  which  are  for  more  than 
one  year  each,  whether  acquired  through  direct  lease,  assignment,  or 
otherwise.  If  any  such  leasehold  is  acquired  by  assignment,  the  charge 
to  this  account  must  not  exceed  the  amount  actually  paid  therefor  by  the 
accounting  company  to  the  assignor. 

Not*. — Cost  of  buildings  and  other  Improvements  should  not  be  included  in 
this  account.  If  at  the  time  of  acquisition  of  an  interest  in  lands  such  Interest 
extends  to  buildings  or  other  Improvements  thereon,  which  improvements  are  de- 
voted by  the  company  to  telegraph  or  cable  operations,  and  if  the  price  of  such 
Improvements  is  not  determined  by  the  contract,  the  buildings  or  improvements 
should  be  appraised  at  their  fair  cash  value  for  use  in  such  operations,  and  such 
appraised  value  should  be  charged  to  account  No.  206,  "  Buildings."  If  such  Im- 
provements are  devoted  to  operations  other  than  telegraph  or  cable  or  held  as 
Investments,  the  cost  (or  the  appraised  value,  if  the  cost  is  not  determined  in  the 
contract  of  acquisition)  should  be  charged  to  account  No.  105,  "  Miscellaneous 
Investments.  •  If  the  improvements  are  removed  or  wrecked,  the  salvage,  less  the 
cost  of  removal  or  wreckage,  should  be  credited  to  this  account. 

206   Buildings. 

This  account  should  include  the  cost  of  all  buildings,  such  as  general 
and  division  offices,  main,  local,  branch,  or  relay  telegraph  or  cable  offices, 
shops,  storehouses,  stables,  and  garages  devoted  to  the  general  purposes  of 
the  company ;  also  of  all  permanent  fixtures,  such  as  water,  steam,  and 
gas  pipes  and  fixtures;  electric  wiring  and  fixtures  for  lighting;  elevators 
and  the  engines  and  motors  specially  provided  for  operating  them ;  fur- 
naces, boilers,  and  other  apparatus  provided  for  producing  steam  for  such 
engines  and  for  heating;  and  electric  generators  specially  provided  for 
producing  current  for  lighting  such  buildings.  This  account  should 
include  such  piers  and  other  foundations  for  machinery  and  apparatus 
as  are  designed  to  be  as  permanent  as  the  buildings  in  which,  or  in  con- 
nection with  which  they  are  constructed,  and  to  outlast  the  first  machinery 
or  apparatus  mounted  thereon. 

It  also  includes  the  cost  of  real-estate  brokers'  commissions,  examina- 
tion and  registration  of  titles,  and  other  expenses,  such  as  architects'  fees, 
and  supervision  Incident  to  the  construction  or  purchase  of  buildings; 
and  the  cost  of  grading  and  cost  of  sidewalks,  fences,  hedges,  etc.,  on 
grounds  used  in  connection  with  such  buildings. 

NOTB. — This  account  should  not  include  any  telegraph  or  cable  equipment,  wiring, 
or  apparatus  for  generating  or  controlling  electricity  for  operation  of  the  telegraph 
or  cable  system. 

lOT.  Telegraph  Equi]?ment. 

This  account  should  Include  the  cost  of  all  electrical,  mechanical,  or 
pneumatic  equipment  in  telegraph  offices  when  such  equipment  is  adapted 
to  use  In  telegraph  operations,  such  as  distributing  frames,  switchboards, 
and  testing  apparatus;  keys,  relays,  and  sounders;  operating  tables; 
automatic  transmitting  and  receiving  apparatus;  duplex,  quadruple!, 
and  repeater  apparatus;  engines,  generators,  batteries,  air  compressors, 
and  other  power  equipment ;  pneumatic  tubes  used  for  conveying  messages 
In  telegraph  offices;  and  other  automatic  message  conveyors.  Include 
herein  the  cost  of  all  associated  interior  wiring,  cabling,  and  conduits  in 
telegraph  ofllces. 


I  III 


II 


38 

208.  Messenger  Equipment. 

This  account  should  Include  the  cost  of  equipment  used  In  the  operation 
of  the  messenger  senice,  such  us  call  circuit  registers,  call  boxes,  associ- 
ated interior  wiring  and  Installation  In  ofBces  and  on  subscribers'  prem- 
ises, and  accessories;  and  also,  when  borne  by  tlie  company,  the  cost  of 
messenger  uniforms. 

209.  Other  Equipment  of  Telegraph  OmcEa. 

This  account  should  Include  the  cost  of  business  equipment  in  tele- 
graph offices,  such  as  furniture,  typewriters,  numbering  machines,  and 
other  incidental  equipment  used  in  the  operating  room.  This  account 
■hould  Include  also  furniture  and  equipment  in  managers'  offices,  in  rest 
and  lunch  rooms,  and  in  operators'  schools;  and  public  office  furniture, 
such  as  counters,  writing  desks,  and  chairs. 

210.  Subscribers'  Equipment. 

This  account  should  include  the  cost  (Including  the  expense  incident 
to  Installation)  of  telegraph  equipment  devoted  to  the  use  of  subscribers, 
such  as  telej?raph  instruments  and  apparatus,  ticiiers.  cables,  wires,  and 
conduits  on  subscribers'  premises. 

NoTB.— Call  boxes  and  associated  Interior  wiring  on  subscribers'  premises  should 
be  includwl  undor  account  No.  208.  "  Messenger  equipment." 

211.  Pole  Lines. 

This  account  should  include  the  cost  of  poles,  towers,  cross  arms,  pins, 
brackets,  braces,  guy  wire,  guy  stubs,  and  other  materials  used  in  the 
construction  of  telegraph  pole  lines;  also  the  cost  of  first  clearing  right 
of  way. 

212.  Aerial  Cable. 

This  account  sh(nild  include  the  cost  of  aerial  cables,  including  the 
cost  of  suspension  wire,  cable  clips  and  rinirs.  cable  boxes  and  fittings, 
pole  seats  and  platforms,  loading  colls,  pot  heads,  protectors,  sleeves, 
and  other  materials  used  in  hanging  such  cables. 

213.  Aerial  Wire. 

This  account  should  include  the  cost  of  aerial  wires,  including  insu- 
lators,  sleeves,  and  other  materials  used  In  attaching  such  wires  to  the 
insulators. 

214.  Underground  Conduits. 

This  account  should  include  the  cost  of  conduits,  including  cost  of  pipe, 
cement,  manholes,  manhole  furnishings,  and  other  materials  used;  cost 
of  connections  to  poles  and  buildings;  and  other  costs  incident  to  the 
installation  of  underground  conduits  for  telegraph  lines. 

215.  Underground  Cable. 

This  account  should  include  the  cost  of  underground  cables,  cable  boxes 
and  fittings,  and  other  materials  used  in  the  work  of  installing  under- 
ground cables  for  telegraph  lines,  Including  as  such,  cables  leading  from 
main  conduits  to  main,  local,  branch,  or  relay  telo«;raph  offices  or  to 
subscribers'  premises, 

216.  Submarine  Telegraph  Cable. 

This  account  should  Include  the  cost  of  submarine  cables,  cable  towera. 
cable  houses  or  boxes  and  their  appurtenances,  when  such  submarlnt 
cables  form  a  part  of  telegraph  lines. 


39 

217.  PwEUMATic  Tubes. 

This  account  should  Include  the  cost  of  outside  pneumatic  tubes  for 
telegraph  lines,  including  the  metal  tubing,  encasement,  and  manheles, 
and  other  material  used  in  their  construction. 

218.  Floating  Equipment. 

This  account  should  Include  the  cost  of  steamships,  steamboats, 
launches,  and  other  vessels  used  in  the  construction  and  maintenance 
of  telegraph  lines.  This  includes  the  cost  of  hulls,  rigging,  boilers, 
machinery,  special  apparatus,  and  all  appurtenances  and  fixtures  neces- 
sary to  equip  such  vessels  for  service. 

219.  Railway  Equipment. 

This  account  should  include  the  cost  of  officers'  cars,  and  of  motor, 
bunk,  pole,  and  hand  cars,  velocipedes,  and  other  railway  equipment 
used  in  the  construction  and  maintenance  of  telegraph  lines;  also  all 
appurtenances  and  fixtures  necessary  to  equip  such  cars  for  service. 

220.  Cable  Equipment. 

This  account  should  include  the  cost  of  all  electrical,  mechanical,  or 
pneumatic  equipment  in  cable  offices,  such  as  switchboards  and  testing 
apparatus,  keys  and  sounders,  operating  tables,  perforators  and  re- 
corders, power  equipment,  and  pneumatic  tubes  and  other  message  con- 
Teyors.  Include  herein  the  cost  of  all  associated  interior  wiring,  cabling, 
and  conduits  in  cable  offices. 

221.  Other  Equipment  of  Cable  Offices. 

This  account  should  include  the  cost  of  business  equipment  in  cable 
offices,  such  as  furniture,  typewriters,  numbering  machines,  and  other 
incidental  equipment  used  in  the  operating  room.  This  account  should 
include  also  the  furniture  and  equipment  In  managers'  offices.  In  rest  and 
lunch  rooms,  and  in  operators'  schools;  and  public  office  furniture,  such 
as  counters,  writing  desks,  and  chairs. 

222.  Cable  Lines. 

This  account  should  include  the  cost  of  cable  lines,  including  submarine 
and  underground  cables,  conduits,  pole  lines,  aerial  cables,  aerial  wires, 
and  all  appurtenances,  when  such  lines  are  used  exclusively  in  the  opera- 
tion of  ocean  cables. 

Cable  Floating  Equipment. 

This  account  should  include  the  cost  of  steamships,  steamboats 
launches,  and  other  vessels  used  In  the  construction  and  maintenance 
of  ocean  cables.  This  includes  the  cost  of  hulls,  rigging,  boilers,  ma- 
chinery, special  apparatus,  and  all  appurtenances  and  fixtures  necessary 
to  equip  such  vessels  for  service. 

Office  Furniture  and  Fixtures. 

This  account  should  Include  the  cost  of  desks,  tables,  chairs,  carpets, 
cases,  movable  partitions,  railings,  shelves,  typewriters,  addressing  ma- 
chines, adding  machines,  and  other  office  devices;  stoves,  poitable  gas  and 
electric  fixtures,  and  other  office  fittings  not  considered  a  part  of  the 
building  and  not  telegraph,  messenger,  and  cable  equipment  provided  for 
in  accounts  Nos.  207,  208,  209,  220,  and  221.  (See  general  note  under 
account  No.  228.) 


40 

226.  Genebajl  Shop  Eqxtipmeitt. 

This  account  should  include  the  cost  of  all  equipment  specially  pro- 
Tided  for  general  shops,  such  as  engines,  gas  producers,  electric  gener- 
ators,  other  power  apparatus  used  In  operating  machinery  In  such  shops, 
machine  tools,  shafting,  belts,  and  like  shop  equipment;  also  such 
smithing  equipment  In  general  shops  as  Is  used  principally  for  general 
purposes  other  than  shoeing  horses  and  repairing  vehicles. 

Portable  tools  and  apparatus  of  special  value  may  be  charged  to  this 
account  and  remain  herein  so  long  as  record  Is  kept  of  such  tools  and 
apparatus     (See  general  note  under  account  No.  228.) 

228.  GiNERAL  Store  Equipment. 

This  account  should  include  the  cost  of  all  equipment  of  general  store 
structures,  such  as  movable  counters,  movable  shelving,  and  other 
movable  equipment  of  like  nature;  carts,  barrows,  trucks,  tools,  and 
other  apparatus  and  appliances  used  in  handling,  storing,  or  packing 
materials  and  supplies.     (See  general  note  under  account  No.  228.) 

NoTB.-Counter8,  shelving,  and  the  like  which  are  permanently  atUched  to  the 
KTUcture  should  be  charged  to  account  No.  206.  "  Buildings." 

227.  General  Stable  and  Gaeage  Equipment. 

This  account  should  include  the  cost  of  equipment  of  stables  and 
garages,  including  horses,  harness,  drays,  wagons,  automobiles,  and  other 
vehicles;  also  equipment  of  shoeing  shops,  harness  repair  shops,  vehicle 
repair  shops,  etc.     (See  general  note  under  account  No.  228.) 

228.  General  Tools  and  Implements. 

This  account  should  include  the  cost  of  portable  testing  apparatus  and 
valuable  tools  and  Implements  devoted  to  the  maintenance  or  construction 
of  the  telegraph  or  cable  plant  and  not  provided  for  In  the  equipment  ac- 
counts. 

Not.  —This  account  should  not  Include  tools  not  yet  in  use  carried  as  suDDlles 
"to" tpL'se."'  '"""   '"'  '°""  "''^"^'•'  '^'    '"  ^^^-'^"^  accolt  No^Tot 
General  Note  to  Accodnts  224  to  228.— Items  of  small  value  or  short  llfA 
mich  as  portable  tool,  liable  to  be  lost  or  stolen,  temporary  shelving,  waste  baskes* 

'^llZT'  "'  ''"""^  ''""''''^  '"  "^""°^  ""^^"^  accoun^ts^rt  clewing 

Interest  During  Construction. 

This  account  should  include  the  Interest  accrued  upon  all  moneys  (and 
credits  available  upon  demand)  devoted  to  the  construction  j.nd  equip- 
ment of  the  property  from  the  time  of  such  devotion  until  the  construc- 
tion Is  ready  for  use.  and  such  proportion  of  the  discount  and  expense  on 
funded  debt  as  is  equitably  assignable  to  the  period  between  the  date  of 
the  issuance  of  securities  and  the  time  when  the  property  acquired,  or  the 
Improvement  made  through   such  issuance,  becomes  available   for  the 
iervlce  for  which  It  is  Intended.     The  proportion  of  Interest,  discount 
and  expense  thus  chargeable  should  be  that  which  the  period  prior  to  th^ 
completion  or  coming  into  service  of  the  facIllUes  or  Improvements  con- 
•tructed  bears  to  the  entire  life  of  the  securities  issued.     (See  sec.  9, 
p.  1^.) 

Interest  receivable  accrued  upon  such  moneys  (and  upon  such  credits) 
•houid  be  credited  to  this  account.  If  any  property  with  respect  to 
which  an  Interest  charge  Is  included  in  this  account  is  withdrawn  or 
fetlred  from  service,  the  amount  of  such   Interest    (estimated,  if  not 


41 

229.  Interest  Dubino  Constbuction — Continued. 

known)  should  be  credited  to  this  account  and  charged  off  as  a  part  of 
the  original  cost  of  the  property  so  retired. 

Note. — No  interest  upon  expenditures  for  replacements  or  reconstruction  should 
be  included  In  this  account  unless  proper  credits  are  made  to  the  appropriata 
plant  and  equipment  accounts  for  any  interest  included  in  such  accounts  in  respect 
of  the  property  retired  or  withdrawn. 

230.  Undistributed  Engineering  and  Superintendence. 

This  account  should  include  expenditures  for  services  and  expenses  of 
engineers,  draftsmen,  and  superintendents  employed  on  preliminary  and 
construction  work,  including  instruments  and  supplies,  when  such  ex- 
penditures can  not  be  assigned  to  specific  construction  accounts. 

281.  Undistributed  Law  EIxpenditures. 

This  account  should  include,  when  not  chargeable  directly  to  the  ac- 
count for  which  incurred,  general  law  expenditures  incurred  In  the  con- 
struction of  the  telegraph  or  cable  plant,  such  as  the  pay  and  expenses 
of  counsel,  solicitors,  and  attorneys,  their  clerks  and  attendants,  and 
exjienses  of  their  offices;  the  cost  of  printing  briefs,  legal  forms,  testi- 
mony, reports,  etc. ;  payments  to  arbitrators  for  the  settlement  of  disputed 
questions;  cost  of  suits,  payments  of  special  fees,  notarial  fees,  witness 
fees,  and  other  court  expenses 

Note. — If  separable,  expenditures  incurred  in  connection  with  the  acquisition 
of  right  of  way  should  be  charged  to  account  No.  204,  "  Right  of  way,"  those 
Incurred  In  the  acquisition  of  other  land  to  account  No.  205,  "  Land,"  and  those 
Incurred  in  connection  with  the  organization  of  the  corporation  to  account  No. 
200,  "Organisation." 

Taxes  During  Construction. 

This  account  should  Include  all  taxes  and  assessments  levied  and  paid 
on  property  belonging  to  the  company  while  under  construction  and 
before  the  plant  is  opened  for  operation,  except  special  taxes  assessed  for 
Improvements. 

Note. — Special  taxes  assessed  for  street  and  other  improvements,  such  as  grad* 
ifig.  sewering,  curbing,  guttering,  paving,  and  sidewalks,  should  be  charged  to  the 
account  to  which  the  property  benefited  is  charged 

Miscellaneous  CJonstruction  Expenditures. 

This  account  should  include  items  which  can  not  properly  be  charged 
to  any  other  plant  and  equipment  account,  such  as  salaries  and  expenses 
of  executive  and  general  officers  of  the  comi)any  before  it  is  ready  to 
begin  operations  and  of  clerks  in  general  offices  engaged  on  construction 
accounts  or  work:  rent  and  repair  of  general  offices  when  rented,  with 
the  office  expenses;  insurance  premiums  during  construction;  also  other 
construction  and  equipment  items  of  a  special  and  incidental  nature. 

This  account  may  include  a  suitable  proportion  of  supply  expense  (as 
defined  in  account  No.  704)  applicable  to  construction,  when  not  assign- 
able to  specific  materials. 

Notb. — This  account  should  not  Include  any  costs  of  organization,  or  any  costs 
or  discounts  connected  with  the  issue  and  disposal  of  stocks,  bonds,  or  otber 
secoritles,  or  commercial  paper. 


S3S. 


w    \ 


mCOME  STATEMENT. 
I.  OPERATING  INCOME. 

800.  Telegraph  and  Cable  Opbbatino  Revenues 45 

801.  Telegraph  and  Cable  Operating  Expenses 45 

Net  Telegraph  and  Cable  Operating  Revenues  (or  Deficit). 

802.  Other  Operating  Revenues 45 

303.  Other  Operating  Expenses 45 

Net  Revenue  (or  Dewcit)  from  Miscellaneous  Operations. 

804.  Uncollectible  Operating  Revenues 45 

805.  Taxes  Assignable  to  Operations 46 

Operating  Income  (or  Loss). 

II.  NONOPERATING  INCOME. 

810.  Income  from  Lease  of  Plant.. 46 

811.  Miscellaneous  Rent  Income 46 

812.  Dividend  Income 46 

313.  Interest  Income 47 

314.  Sinking  and  Other  Reserve  Fund  Accretions 47 

315.  Profits  from  Operations  of  Others 47 

316.  Miscellaneous  Nonoperating  Income 47 

Gross  Income  (or  Loss). 

III.  DEDUCTIONS  FROM  GROSS  INCOME. 

320.  Rent  foe  Lease  of  Plant 48 

821.  Miscellaneous  Rents 48 

822.  Interest  on  Funded  Debt 48 

823.  Other  Interest  Deductions 48 

824.  Nonoperating  Taxes 48 

825.  Loss  ON  Operations  of  Others 48 

326.  Amortization  of  Debt  Discount  and  Expense 49 

827.  Release  of  Premiums  ON  Debt — Cr 49 

828.  Miscellaneous  Deductions  from  Income 49 

Net  Income  (or  Loss). 

IV.  DISPOSITION  OF  NET  INCOME. 

330.  Appropriations  of  Income  to  Sinking  and  Other  Reserve  Funds 49 

331.  Dividend  Appropriations  of  Income 49 

832.  Appropriations  of  Income  for  Construction,  Equipment,  and  Bet- 
terments   50 

S33.  Miscellaneous  Appropriations  of  Income 50 

Income  Balance  Transferred  to  Credit  (or  Debit)  of  Profit  and 
Loss  Account. 

(43) 


II     i. 


Il 


TEXT  PERTAINING  TO  ACCOUNTS  IN  THE  INCOME  STATEMENT. 


I.  Operating  Income. 

800.  Telegraph  and  Cable  Operating  Revenues. 

This  account  should  include  the  total  operating  revenues  derived  from 
the  telegraph  and  cable  operations  of  the  company  for  the  period  covered 
by  the  income  statement.  (For  the  primary  operating  revenue  accounts, 
see  pp.  59  to  61.) 

801.  Telegraph  and  Cable  Operating  Expenses. 

This  account  should  include  the  total  operating  expenses  of  the  tele- 
graph and  cable  oiierations  of  the  company  for  the  period  covered  by  the 
income  statement.  (For  the  primary  operating  expense  accounts,  see 
pp.  65  to  71.) 

802.  Other  Operating  Revenues. 

This  account  should  include  the  total  revenues  of  the  company  derived 
from  operations  other  than  telegraph  and  cable  operations,  for  the  period 
covered  by  the  income  statement.  This  account  includes  the  revenue 
derived  from  the  operation  of  property  carried  in  balance-sheet  account 
No.  105,  "  Miscellaneous  investments,"  when  such  property  Is  operated 
by  the  accounting  company. 

803.  Other  Operating  Expenses. 

This  account  should  include  the  total  expenses  of  operations  other  than 
telegraph  and  cable  operations  for  the  period  covered  by  the  income 
rtatement.  This  account  includes  the  expenses  of  the  operation  of 
property  carried  in  balance-sheet  account  No.  105,  "Miscellaneous  in- 
vestments," when  such  property  is  operated  by  the  accounting  company. 

804.  Uncollectible  Operating  Revenues. 

This  account  should  include  the  amount  of  any  accounts  for  telegrai»h, 
cable,  and  other  services  which,  after  a  reasonably  diligent  effort  to  col- 
lect, have  proved  impracticable  of  collection.  This  account  should  include 
only  uncollectible  bills  for  amounts  which  have  been  treated  as  operating 
revenues. 

This  account  may  Include  monthly  charges,  based  upon  estimates,  to 
create  a  reserve  for  uncollectible  bills,  provided  such  reserve  is  adjusted 
annually  in  accordance  with  the  experience  of  the  accounting  company. 
Such  amounts  should  be  credited  to  account  No.  172,  "  Reserve  for  doubt- 
ful accounts."  jjgainst  which  should  be  charged  bills  that  have  proved 
Impracticable  of  collection. 

Note. — Uncollectible  bills  for  amounts  which  have  not  been  treated  as  operating 
revenues  should  be  charged  to  account  No.  328,  "  Miscellaneous  deductions  from 
Income,"  or  to  Prolit  and  Loss  Account,  as  may  be  appropriate. 

(45) 


46 


47 


1  I 


It 


805.  Taxes  AssioNAni-E  to  Operations. 

This  account  should  Include  Federal.  State,  county,  municipal,  and 
other  taxing-district  taxes  relating  to  telegruph  and  cable  property, 
operations,  and  privileges  for  the  period  for  which  tlie  Income  Account 
Is  stated;  also  annual  or  more  frequent  payments  in  respect  of  fran- 
chises. This  account  should  also  include  the  taxes  on  other  property 
and  operations,  the  revenues  and  expenses  of  which  are  Included  in 
accounts  Nos.  302  and  303,  respectively.     (See  sec.  14,  p.  14.) 

II.   NONOPERATINO   INCOMI. 
810.    INOOME  FROM   LEASE  OF  PLANT. 

This  account  should  include  all  Income  accrued  from  the  company** 
interest  in  telegraph  or  cable  plant  (including  the  equipment  and  other 
property  covereil  by  the  contract)  held  by  others  under  some  form  of 
lease  whereby  the  company  surrenders  possession  of  such  property  for 
operating  purixxscs. 

This  account  should  include  the  entire  amount  of  rent  (except  taxes) 
receivable  by  the  lessor  according  to  the  terms  of  lease  or  other  agree- 
ment, whether  it  is  paid  to  the  lessor  in  cash  or  is  disbursed  by  the 
lessee  for  the  account  of  the  lessor  as  interest  on  funded  debt,  guaranteed 
dividends  on  stock,  or  otherwise. 

This  account  is  intended  to  cover  only  rents  receivable  for  the  ns«  of 
an  entire  telegraph  or  cable  plant  or  an  iniiiortant  section  of  a  telegraph 
or  cable  plant. 

When  the  lessor  company  maintains  the  plant  and  equipment  leased, 
the  cost  of  maintaining  the  property  rented  should  be  charged  to  this 
account 

811.  Miscellaneous  Rent  Income. 

This  account  should  include  the  income  accruing  to  the  company  as  a 
retum  upon  rented  proi^erty,  other  than  telegraph  or  cable  plant  pro- 
Tided  for  in  account  No.  310. 

Tills  account  should  include  such  items  as  the  rent  from  lands,  build- 
ings, wires,  instrunjents,  ducts,  short  portions  of  pole  lines,  and  short 
■ections  of  conduits 

To  this  account  should  be  charged  the  cost  of  maintenance  of  the 
property  rented,  also  incidental  expenses  In  connection  with  such  prop- 
erty, such  as  the  cost  of  negotiating  contracts,  advertising  for  tenants. 
fees  paid  conveyancers,  collectors'  commissions,  and  analogous  items. 

Note. — If  the  property  rented  Is  so  Intimately  connected  with  property  used 
In  the  company's  telegraph  or  cal)lo  operations  that  the  expenses  of  the  former 
can  not  l>e  nscertalncd,  the  revenues  should  be  credited  to  account  No.  520  or  No. 
521  as  may  be  appropriate,  and  the  expenses  in  connection  with  the  rented  prop- 
erty sfiould  be  included  in  operating  expenses. 

812.  DiviDENn  Income. 

This  account  should  Include  dividends  declared  on  stocks,  the  Income 
from  which  Is  the  property  of  the  accounting  company,  whether  such 
stocks  are  owned  by  the  accounting  company  and  held  in  its  treasury  or 
deposited  in  trust,  or  are  controlled  throigh  lease  or  otherwise.  Atvrnals 
of  guaranteed  dividends  may  be  included  in  this  account  If  their  payment 
Isa  reasonably  assured. 

Note  A. — This  account  should  not  include  credits  for  dividends  on  stocks  Issuetl 
or  assumed  by  the  accounting  company   and  owned  by   It,   whether  held  la  Ita 


812.  Dividend  Income — Continued. 

treasury,  in  special  deposits,  or  In  sinking  or  other  reserve  funds,  or  pledged  as 

collateral. 

Note  B. — Dividends  on  stocks  of  other  companies  held  In  sinking  or  other  re- 
serve funds  should  be  credited  to  account  No.  314,  "  Sinking  and  other  reserve 

fund  accretions." 

813.  Interest  Income. 

This  account  should  include  interest  on  bonds  and  other  funded  securi 
ties  and  on  debenture  stock  of  other  companies,  the  income  from  which  is 
the  proi>erty  of  the  accounting  company,  whether  such  securities  are 
owne<l  by  the  accounting  company  and  held  in  Its  treasury  or  deposited 
In  trust,  or  are  controlled  through  lease  or  otherwise;  also  Interest  on 
notes,  bank  balances,  and  open  accounts:  discount  on  short-term  notes  and 
other  analogous  items.  Interest  accrue<i  should  not  be  credited  unless  its 
payment  is  reasonably  assured  by  past  experience,  guaranty,  anticipated 
provis?lon.  or  otherwise:  in  other  cases  the  credit  to  this  account  should 
be  based  upon  the  interest  actually  collected. 

At  the  option  of  the  company  there  may  be  included  in  this  account 
the  portion  applicable  to  the  fiscal  period  of  the  amount  requisite  to 
extinguish,  during  the  interval  between  the  date  of  acquisition  and  the 
date  of  maturity,  the  discount  or  premium  on  funded  securities  of  other 
companies. 

Note  A. — This  account  should  not  include  amounts  under  the  name  or  in  the 
form  of  Interest  on   funded  securities  issued   or  assumed  by  the  accounting  com- 
pany and  owned  oy  it.  whether  held  In  Its  treasury,  in  special  deposits,  or  In  sink 
Ing  or  other  reserve  funds,  or  pledged  as  collateral. 

Nom  B. — Interest  on  funded  securities  of  other  companies  held  in  sinkin;;  or 
other  re.s('rve  funds  should  be  included  in  account  No.  314,  "  Sinking  and  other 
reserve  fund  accretions." 

814.  Sinking  and  Other  Reserve  Fund  AccRimoNS. 

This  account  should  Include  Income  accruing  on  cash,  securities,  and 
other  assets  In  the  hands  of  the  trustees  or  specifically  set  aside  for  sink- 
ing and  other  reserve  funds,  other  than  securities  issued  or  assumed  t)y 
the  accounting  company. 

At  the  option  of  the  company  there  may  be  Included  in  this  account 
the  portion  applicable  to  the  fiscal  period  of  the  amount  requisite  to 
extinguish,  during  the  interval  between  the  date  of  acquisition  and  the 
date  of  maturity,  the  discount  or  premium  on  funded  securities  of  other 
companies  held  in  sinking  or  other  reserve  funds. 

Note. — If  the  income  on  any  special  fund  Is  retained  in  the  fund  and  If  the 
fnnd  is  represented  by  a  reserve,  the  amounts  credited  to  this  account  in  respect 
to  such  Income  should  be  concurrently  charged  to  account  No.  330,  "Appropri- 
ations of  Income  to  sinking  and  other  reserve  funds,"  and  credited  to  the  appro- 
priate reserve  account  or  accounts. 

815.  Profits  from  Operations  of  Others. 

This  account  should  include  income  accruing  to  the  accounting  com- 
pany from  operations  of  others  whenever  In  accordance  with  the  terms 
of  any  contract  the  company  Is  entitled  to  participate  in  the  profits  from 
such  source. 

Note. — This  account  should  not  Include  dividends  or  other  returns  upon  se- 
curities Issued  by  such  separately  operating  company. 

316.    MiSCFXLANEOUS    NONOPERATING    INCOME. 

This  account  should  liclude  all  nonoperating  income  aot  provided  for 
In  the  foregoing  accounts. 


48 


^ 


I  ilF 


III.  Deductions  rROM  Gross  Income. 

320    Rent  for  L,ea8e  of  Plant. 

This  account  should  iuclude  all  a  mounts  accrued  against  the  comimny 
for  rent  of  telegraph  or  cable  plant  (including  the  equipment  and  other 
property  covered  by  the  contract)  which  it  holds  under  some  form  of 
lease  from  another,  and  of  which  it  has  exclusive  possession  for  oiierating 
purposes. 

This  account  should  include  the  entire  amount  of  rent  (except  taxes) 

pay.ible  by  the  lessee  according  to  the  terms  of  lease  or  other  agreement, 

whether  it  is  paid  to  the  lessor  in  cash  or  is  disbursed  by  the  lessee  for 

.   the  account  of  the  lessor  as  interest  on  funded  debt,  guaranteed  dividends 

on  stock,  or  otherwise. 

This  account  is  intended  to  cover  only  the  rents  payable  for  the  use  of 
an  entire  telegraph  or  cable  plant  or  an  important  section  of  a  telegraph 
or  cable  plant. 

821.  Miscellaneous  R^nts. 

This  account  should  include  amounts  accrued  as  due  for  rents  of  wires, 
ducts,  conduits,  subw.iys.  land,  pole  lines  as  supports  for  wire,  and  other 
property  not  provided  for  elsewhere,  when  leased  for  more  than  one  year. 

Note. — Rents  for  similar  property  when  for  periods  of  one  year  or  less  should  be 
charged  to  account  No    607,  "  Minor  rents  for  property." 

322.  Interest  on  Funded  Debt. 

This  account  should  include  the  current  accruals  of  interest  on  all 
classes  of  unmatured  funded  debt  issued  or  assumed  by  the  accounting 
company;  interest  on  receiver's  certificates  issued  for  a  term  of  more 
than  one  year;  and  Interest  accruals  on  debenture  stock. 

Note  A. — Interest  accraing  on  funded  .sectirities  after  maturity  should  be  In- 
cluded in  account  No.  323,  '  Other  Interest  deductions." 

Note  B. — This  account  should  not  include  amounts  under  the  name  or  in  the 
form  of  Interest  on  securities  held  by  the  company  in  its  treasury,  in  sinking  or 
other  reserve  funds,  or  pledged  as  collateral.  If  any  of  the  funded  debt  securities 
issued  or  assumed  by  the  company  are  held  in  Its  sinking  or  other  reserve  fnndn. 
other  than  funds  covered  by  account  No.  120,  "  Provident  fund  asaeta,"  and 
amounts  are  assigned  to  such  funds  under  the  name  or  In  the  form  of  interest  on 
such  securities,  such  amounts  should  not  be  charged  to  this  account  as  IntereKt  on 
funded  debt,  but  to  account  No.  330,  "Appropriations  of  Income  to  sinking  and 
other  reserve  funds." 

823.  Other  Interest  Deductions. 

This  account  should  include  all  Interest  accrued  on  unfunded  debt,  such 
as  notes  payable  on  demand  or  having  dates  of  maturity  one  year  or 
less  from  date  of  Issue,  discount  on  short-term  notes,  interest  on  open 
accounts,  and  other  analogous  items;  also  interest  accruing  on  funded 
debt  securities  after  maturity  of  debt 

324.    NONOPERATING  TAXES. 

This  account  should  Include  all  taxes  accrued  other  than  those  pro- 
vided for  in  account  Xo.  .*JOu.  **  Taxes  assignable  to  operutions,"  such  :is 
taxes  on  securities  owned,  taxes  on  Income  from  securities  owned,  taxes 
on  nonoperated  property,  and  analogous  Items. 

325.  Loss  ON  Operations  of  Others. 

This  account  should  include  all  liabilities  accruing  against  the  company 
whenever,  in  accordance  with  the  terms  of  any  contract,  the  compauy  is 
bound  to  contribute  toward  reimbursement  of  the  losses  resulting  from 
the  operations  of  others. 


826.  Amortisation  of  Debt  Discount  and  Expense. 

Charge  to  this  account  during  each  fiscal  period  that  proportion  of  the 
unamortized  discount  and  expense  on  outstanding  funded  debt  wliicli  is 
applicable  to  the  period.    (See  sec.  5,  p.  10.) 

827.  Release  of  Premiums  on  Debt— Ol 

Credit  to  this  account  during  each  fiscal  period  the  proportion  of  tbe 
premium  at  which  outstanding  funded  debt  was  issued  whlcli  is  applicable 
to  the  period.     (See  sec  6,  p.  10.) 

828.  Miscellaneous  Deductions  from  Inoomk. 

This  account  should  include  all  items  not  provided  for  elsewhere  prop- 
erly chargeable  to  gross  income  for  the  fiscal  period.  Among  other  items 
It  should  include  deductions  from  gross  income  which  are  in  the  nature 
of  fixed  charges  and  are  not  otherwise  providied  for,  such  as  those  in- 
quired by  the  terms  of  some  contract,  agreement,  law.  or  ordinance.  This 
account  should  not  Include  any  appropriations  of  income  that  rest  solely 
in  the  discretion  of  the  accounting  company. 

IV.  Disposition  of  Net  Incx)mb. 

890.  Appropriations  of  Income  to  Sinking  and  Other  Reserve  Funds. 

This  account  should  include  amounts  of  income  appropriated  for 
sinking  and  other  reserve  funds.  The  terms  of  mortgages,  deeds  of 
trust,  or  other  contracts  providing  for  the  allocation  of  income  or  for 
the  payment  of  definite  sums  Into  sinking  and  other  reserve  funds,  and 
for  accretions  to  such  funds  on  account  of  income  from  previous  invest- 
ments, may  be  made  the  bases  of  such  appropriatlona 

The  appropriations  for  payments  or  accretions  to  the  funds  may  in- 
clude (1)  direct  payments,  (2)  amounts  assigned  under  the  name  or  in 
the  form  of  interest  or  dividends  on  securities  issued  or  assumed  by  the 
accounting  company  and  held  in  such  funds,  (3)  Income  from  investments 
in  securities  held  in  such  funds  other  than  those  issued  or  assumed  by 
the  accounting  company,  and  (6)  income  from  cash  and  other  property 
held  in  such  funds. 

NoTB  A. — The  amounts  charged  to  this  account  should  be  concurrently  credited 
to  the  appropriate  reserve  account  or  accounts. 

NoTS  B. — If  appropriations  for  direct  payments  are  made  from  surplus,  they 
should  be  charged  to  account  No.  411,  "ApproprUUons  of  surplus  to  ainklni  mad 
other  reserve  funds." 

SSL  Dividend  Appropriations  of  Income. 

This  account  should  include  amounts  definitely  declared  payable  from 
income  as  dividends  on  actually  outstanding  capital  stock  issued  or 
assumed  by  the  accounting  company,  other  than  debenture  stock. 

If  a  dividend  is  payable  in  any  thing  other  than  money,  such  thing 
should  be  described  In  the  entry  with  sufllclent  particularity  to 
identify  it 

This  account  should  be  subdivided  so  as  to  show  separately  the  divi- 
dends on  the  various  classes  of  capital  stock.     (See  account  No.  150.) 

Note  A. — ^The  pajments  of  Interest  on  debenture  stock  should  be  charged  to 
SccouDt  No.  822,  ••  Interest  on  funded  debt." 

NoTB  B.— This  account  should  not  include  charges  under  the  name  or  in  the 
form  of  dividends  on  capital  stock  issued  or  assumed  by  the  accounting  company 
and  owned  bj  it,  whether  held  in  Ita  treasury,  in  apecUl  deposits,  or  ta  sinking 

66922*— 13 A 


111 


50 

» 

831.  Dividend  Appbopmationb  of  Income — Continued. 

or  other  reserve  funds,  or  pledged  as  collateral.     (See  account  No.  330,  "Appro- 
prlationa  of  Income  to  sinking  and  other  reserve  funds."  > 

NOTB  C. This  account  should  be  used  unless  appropriations  are  definitely  made 

chargeable  to  surplus,  In  which  case  they  should  be  charged  to  account  No.  412, 
••  Dividend  appropriations  of  surplus." 

332.  Appbopbiations  of   Income  fob  Constbuction,  Equipment,  and  Betteb- 

MENTS. 

This  account  should  include  amounts  appropriated  from  Income  for 
construction  and  equipment  and  for  betterments  of  property  carried  In 
plant  and  equipment  accounts. 

These  amounts  should  be  subdivided  so  as  to  show  (a)  amounts  ex- 
pended during  preceding  fiscal  periods,  (6)  amounts  expended  during 
the  current  fiscal  period,  and  (c)  amounts  held  In  reserve. 

IfOTK. This  account  should  be  used  unless  appropriations  are  definitely  made 

chargeable  to  surplus,  in  which  case  they  should  be  charged  to  account  No.  416, 
"Appropriations  of  surplus  for  construction,  equipment,  and  betterments." 

833.  Miscellaneous  Appbopbiations  or  Income. 

This  account  should  include  appropriations  of  Income  not  provlde<l  for 

elsewhere. 

NoTB. — This  account  should  be  used  unless  appropriations  are  definitely  made 
chargeable  to  surplus,  in  which  case  they  should  be  charged  to  account  No.  416, 
**  lliscellaneous  appropriations  of  surplus." 


' 


III 


f 


.  # 


PBOFIT  AND  LOSS   ACCOUNT. 

I.  CREDITS. 

Pac*. 

Balance  (at  Beginninq  of  I-'iscal  Period). 

400.  CREDrr  Baijince  Transferred  from  Income  Account 53 

401.  Miscellaneous  Credits ^ 

Balance  DEBrr  (at  End  of  Fiscal  Period)  Carried  to  Balance  Sheet. 

II.  DEBITS. 

Balance  [at  Beginnino  of  Fiscal  Period). 

410.  Debit  Balance  Transferred  from  Income  Account 68 

411.  Appropriations  of  Surplus  to  Sinkino  and  Other  Reserve  Funds..  53 

412.  Dividend  Appropriations  of  Surplus 54 

413.  Realized   Depreciation   Not  Covered  by  Reserves 64 

414.  Amortization  Unprovided  for  Elsewhere 64 

415.  Appropriations    of    Surplus    for    Construction,    Equipment,    and 

Betterments ^ 

416.  Miscellaneous  Appropriations  of  Surplus 54 

417.  Miscellaneous  Debits ^ 

Balance  Credft  (at  End  op  Fiscal  Period)  Carried  to  Balance  Sheei. 

(51) 


i 


TEXT  PBRTAINING  TO  PROFIT  AND  LOSS  AOCJOUNTS. 


I.  Credits. 

400l  Credit  Balance  Transferred  from  Income  Account. 

Under  this  title  should  be  shown  the  amount  of  net  income  brought 
forward  from  the  Income  Account. 

#QL  Miscellaneous  Credits. 

This  account  should  include  amounts,  not  provided  for  elsewhere, 
transferred  to  Profit  and  Loss  from  other  accounts,  and  amounts  repre- 
senting increases  in  resources  not  properly  assignable  to  the  income  of 
the  fiscal  period  for  which  the  accounts  are  stated.  Among  the  items 
which  should  be  credited  to  this  account  are — 
Adjustment  or  cancellation  of  old  balance-sheet  accounts, 
Profits  derived  from  the  sale  of  property  carried  in  account  No.  105, 
^  Miscellaneous  Investments," 

Credits  resulting  from  adjustments  required  to  bring  to  par  securi- 
ties issued  or  assumed  by  the  accounting  company  and  reacquired  at  s 
cost  less  than  the  par  value, 

Premium  on  capital  stock  at  the  time  of  its  reacquirement, 
Unextinguished  premiums  on  funded  debt  reacquired  before  maturity. 

II.  Debfts. 

410.  Debit  Balance  Transferred  from  Income  Account. 

Under  this  title  should  be  shown  the  amount  of  net  loss  brought  for- 
ward from  the  Income  Account 

411.  Appropriations  of  Surplus  to  Sinking  and  Other  Reserve  Funds. 

This  account  should  include  amounts  definitely  appropriated  from  sur- 
plus and  applied  to  sinking  and  other  reserve  funds.  The  terms  of  mort- 
gages, deeds  of  trust,  or  other  contracts  providing  for  the  allocation  of 
surplus  or  for  the  payment  of  definite  amounts  into  sinking  and  other 
reserve  funds  may  be  made  the  basis  of  such  appropriations. 

If  appropriations  are  made  from  surplus  to  cover  sums  equivalent  to 
dividends  on  stock  Issued  or  assumed  by  the  accounting  company  and 
held  In  such  funds  the  amounts  of  such  appropriations  may  be  included 
in  this  account 

NoTB  A. — If   similar   appropriations   are   made   from    income,    they   should    be 
charged   to   account   No.   3.30,   "Appropriations   of  income   to   sinlcing   and   other 
reserve  funds." 

Note  B. — If  appropriations  are  made  to  cover  the  income  accruing  on  sinking 
fund  assets  and  to  cover  amounts  equivalent  to  interest  on  securities  issued  or 
assumed  by  the  accounting  company  and  held  in  such  funds,  the  amounts  of  such 
appropriations  should  be  included  in  account  No.  330,  "Appropriations  of  income 
*  to  sinking  and  other  reserve  funds."  If  appropriations  are  made  from  income  to 
cover  sums  equivalent  to  dividends  on  stock  issued  or  assumed  by  the  accounting 
company  and  held  In  such  funds,  the  amounts  of  such  appropriations  may  be 
Included  in  account  No.  330. 

NoTB  C. — The  amounts  charged  to  this  account  should  be  concurrently  credited 
to  the  appropriate  reserve  account  or  accounts. 

(53) 


Ill 


54 

412.  Dividend  AFFBOPBiAXidNS  or  Surplus. 

This  account  should  include  amounts  definitely  declared  payable  from 
surplus  as  dividends  on  actually  outstanding  capital  stock  issued  or 
assumed  by  the  accounting  company,  other  than  debenture  stock. 

If  a  dividend  is  payable  in  any  thing  other  than  money,  such  thing 
should  be  described  in  the  entry  with  sufficient  particularity  to  Identify  It. 

This  account  should  be  subdivided  so  as  to  show  separately  the  divi- 
dends on  the  various  classes  of  capital  stock.     (See  account  No.  150.) 

NoTB  A. — Interest  accrued  on  debenture  stock  should  be  charged  to  account  Na 
822,  "  Interest  on  funded  debt." 

NoTB  B. — This  account  should  not  include  charges  under  the  name  or  In  the 
form  of  dividends  on  capital  stock  issued  or  assumed  by  the  accounting  company 
and  owned  by  it,  whether  held  In  its  treasury.  In  special  deposits.  In  sinking  or 
other  reserve  funds,  or  pledged  aa  collateral.  (See  account  No.  411,  "Appropria- 
tions of  surplus  to  sinking  and  other  reserve  funds.") 

NoTB  C. — If  similar  appropriations  are  made  from  income,  they  should  b« 
charged  to  account  No.  331,  "  Dividend  appropriations  of  Income." 

413.  Realized  Depreciation  Not  Covered  by  Keserves. 

This  account  should  include  the  realized  depreciation  (the  difference 
between  the  original  cost  and  the  salvage,  if  any)  on  tangible  proi)erty 
retired,  if  such  depreciation  has  not  been  provided  for  through  a  de- 
preciation reserve.  This  includes  such  portion  of  the  realized  depre- 
ciation on  any  physical  property  which  was  installed  prior  to  the  period 
for  which  the  reserve  was  established  as  is  due  to  life  in  service  before 
that  date.  This  portion  may  be  estimated  on  the  basis  of  the  proportion 
which  the  life  in  service  of  the  property  in  question  prior  to  the  period 
for  which  the  reserve  was  established  bears  to  its  entire  life  in  service. 
(See  sec.  21,  p.  16.) 

414.  Amortization  Unprovided  for  Elsewhere. 

Charge  to  this  account,  when  any  intangible  property  expires  or  is 
relinquished,  such  portion  of  its  cost  as  has  not  been  previously  written 
off  or  provided  for  In  account  No.  171,  "Reserve  for  amortization  of 
Intangible  capital."  Charge  also  to  this  account  all  optional  amortiza- 
tion, such  as  that  of  assets  carried  in  accounts  No.  200,  "  Organization." 
and  No.  203,  "  Other  Intangible  capital.** 

415.  APPROPRDLTioNs  or  Subflus  fob  C3oN8TBUcno!i,  Equipment,  and  BETrKR- 

ments. 

This  account  should  include  amounts  appropriated  from  surplus  for 
construction  and  equipment  and  for  betterments  of  property  carried  In 
the  plant  and  equipment  accounts. 

These  amounts  should  be  subdivided  so  as  to  show  (o)  amounts  ex- 
pended during  preceding  fiscal  periods,  (6)  amounts  expended  during 
the  current  fiscal  period,  and  (c)  amounts  held  in  reserve. 

NoT«. — ^Thls  account  should  be  used  If  appropriations  are  definitely  made  as 
chargeable  to  surplus.  If  similar  appropriations  are  made  from  Income,  they  should 
be  charged  to  account  No.  332,  "Appropriations  of  Income  for  construction,  equip- 
ment, and  betterments." 

416.  Miscellaneous  Appropriations  of  Surplus. 

This  account  should  include  appropriationa  of  surplus  not  provided  for 
elsewhete. 

fjOTi. ^Thls  account   should   be   used   when    the  appropriations   are   definitely 

made  as  chargeable  to  surplus.  If  similar  appropriations  are  made  from  lnc«tne, 
they  should  be  charged  to  account  No.  333,  "  Miscellaneous  appropriations  of 
Income." 


55 

417.  Miscellaneous  Debits. 

This  account  should  include  amounts  transferred  from  Profit  and  Loss 
to  other  accounts  and  not  provided  for  elsewhere,  amounts  written  off  in 
consequence  of  adjustments,  and  payments  not  properly  chargeable  to 
Income  for  the  fiscsil  i»eriod  for  which  the  accounts  are  stated.  Among 
the  items  which  should  be  charged  to  this  account  are — 
Adjustment  or  cancellation  of  old  balance-Pheet  accounts, 
Losses  resulting  from  the  sale,  destruction,  or  retirement  of  property 
carrietl  in  .lecount  No.  105,  "  Miscellaneous  investments." 

Losses  resulting  from  adjustments  required  to  bring  to  par  securi- 
ties issued  or  assumed  by  the  accounting  company  and  reacquired  at  a 
cost  exceetiiug  the  par  value. 

Deductions  made  to  extinguish  discount  on  capital  stock. 
Deductions  made  to  amortize  debt  discount  and  expense. 

jfo'iK— A  complete  analysis  of  this  account  will  be  required  in  the  annual  r«« 
porta  of  the  company  to  the  Commission. 


OPERATING  BEVENXTB  ACCOUNTS. 

I.  Revenues  trom  Transmission — Telegraph. 

«  Pnge. 

600.  Commercial  Telegraph  Tolls 59 

501.  Telegraph  Tolls  on  Cable  Messages 59 

602.  Government  Telegraph  Tolls 59 

503.  Press  Telegraph  Tolls 59 

604.  Money  Transfer  Tolls 59 

605.  Stock  and  Commercial  News  Revenues ^9 

506.  Other  Telegraph  Transmission  Revenues 59 

507.  Telephone  Transmission  Tolls— Dr ^q 

II.  Revenues  prom  Transmission — Cable. 

610.  Commercial  Cable  Tolls gQ 

511.  Government  Cable  Tolls go 

512.  Press  Cable  Tolls go 

513.  Other  Cable  Transmission  Revenues go 

III.  Revenues  from  Operations  Other  than  Thansmis^sio:^. 

520.  Rents  from  Leased  Wires 50 

521.  Rents  from  Other  Operated  Property go 

522.  Money  Transfer  Premiums gj 

523.  Messenger  Service  Revenues gi 

524.  Time  Service  Revenues g^ 

625.  Other  Nontransmission  Revenues gj 

IV.  Contract  Payments  to  Transportation  Companies. 

530.  Contract  Revenues— Dr g] 

(57) 


11 


TEXT  PERTAINING  TO  OPERATING  REVENUE  ACCOUNTS. 


601. 


I.  Revenues  from  Transmission — Telegraph. 

500.  Commercial  Telegraph  Tolls. 

This  account  should  include  all  revenues  derived  from  the  transmfs 
sion  of  telegraph  messjiges  at  commercial  rates;  also  from  transmission 
of  telegraph  messjiges  at  government  rates,  when  collection  is  made  at 
local  offices.  This  includes  the  revenues  on  messages  handled  exclusively 
by  the  accounting  company ;  also  the  company's  proportion  of  revenues  on 
through  messages  handled  jointly  with  land-line  telegraph,  wireless  tele- 
graph, telephone,  and  other  companies. 

Note. — Land-line  telegraph   companies'   earnings   on   cable   messages  should   be 
included  in  account  No.   501,   **  Telegraph  toils  on   cable  messaijes/' 

Telegraph  Tolls  on  Cable  Messages. 

This  account  should  include  all  revenues  of  land-line  telegraph  com- 
panies derived  from  the  transmission  of  cable  messages  over  land  lines 
at  commercial  rates.  The  revenue  to  be  credited  to  this  account  m:iy  be 
based  on  the  local  rates  of  the  laud-line  telegraph  company  or  on  its 
proportion  of  through  rates. 

502.  Government  TELEiiRAPH  Tolls. 

This  account  should  Include  all  revenues  derived  from  the  transmission 
of  messages  at  government  rates  when  settlements  for  such  messages  .ire, 
made  through   the  general   offices  of  tl^  company,  including  telegraph 
messages  and  land-line  transmission  of  wireless  and  cable  messages. 

603.  Press  Telegraph  Tolls. 

This  account  should  Include  all  revenues  derived  from  the  transmis- 
Blon  of  press  messages  at  other  than  commercial  rates,  including  telegrai>li 
messages  and  land-line  transmission  of  wireless  and  cable  press  messages. 

604.  Money  Transfer  Tolls. 

This  account  should  include  all  revenues  derived  from  the  transmis- 
sion of  messages  incident  to  the  transfer  of  money,  including  telegraph 
messages  and  land-line  transmission  of  wireless  and  cable  messages. 

fiOTV. — The  preralnms  on  the  money  transferred  should  be  credited  to  account 
No.    622,    "Money    transfer    premiums." 

505.  Stock  and  Commfrcial  News  Rkvenues. 

This  account  should  include  all  revenues  derived  from  the  transmis- 
sion or  sale  of  stock  and  other  market  reports,  sporting  news,  election  re- 
turns, marine  reports,  and  similar  items. 

OOd  Other  Telegraph  Transmission  Revenues. 

This  account  should  include  all  revenues  derived  from  the  transmission 
of  telegraph  messages  and  not  provided  for  elsewhere, 

(58) 


BOT.  Telefhoitb  Tbansmisston   Tolls — Dr. 

This  account  should  Include  charges  for  amounts  due  telephone 
companies  for  the  transmission  of  telegrams  and  cablegrams  over  tele- 
phone lines.  The  amounts  so  chargeable  may  be  the  telephone  com- 
panies' proportions  of  the  through  rate  or  may  be  the  telephone  com- 
panies' charges  for  toll  or  exchange  service. 

Note. — If  telephones  installed  for  the  transaction  of  ordinary  bnsineM  ar* 
osed  only  tncidontally  for  the  transmission  of  telegrams  or  cablo^rama,  th« 
entire  expense  of  such  telephones  may  be  charged  to  the  appropriate  operating 
expense  accounts  and  no  charge  need  be  made  to  this  account. 

II.  Revenues  from  Transmission — Cable. 

510.  CoMUKnciAL  Cable  Tolls. 

This  account  should  include  all  revenues  derived  from  the  transmit- 
tlon  of  messages  by  o(^ean  cable  lines  at  commercial  rates;  also  from 
transmission  of  messages  at  government  rates,  when  collection  Is  made  at 
local  offices.  The  revenue  to  be  credited  to  this  account  may  be  based  on 
the  rates  of  the  company  for  cable  service  or  on  the  proportion  of  through 
rates  for  cable  and  land-line  telegraph  service. 

611.  Government  Cable  Tolls. 

This  account  should  include  all  revenues  derived  from  the  transmis- 
sion of  messages  by  ocean  cable  lines  at  government  rates,  when  settle- 
ments for  such  messages  are  made  through  the  general  offices  of  the 
company. 

B12.  Press  Cable  Tolls. 

This  account  should  Include  all  revenues  derived  from  the  transmis- 
sion of  press  messages  by  ocean  cable  lines  at  other  than  commercial 
rates. 

513.  Otlieb  Cable  Transmission  Revenues. 

This  account  should  Include  all  revenues  derived  from  the  transmis- 
sion of  messages  by  ocean  cable  lines  and  not  provided  for  elsewhere. 

III.  Revenues  from  Operations  Other  than  Transmission. 

620.  Rents  from  Leased  Wires. 

This  account  should  include  all  revenues  accruing  as  rent  from  wires 
used  by  telegraph  companies,  telephone  companies,  brolcers,  and  others, 
when  the  exi)ense  of  maintaining  such  wires  can  not  be  separated  from 
the  maintenance  of  lines  used  by  the  company. 

NOTB. — If  the  expenses  on  the  leasiod  wires  can  be  ascertained,  the  rents  received 
and  the  expenses  in  connection  with  such  wires  should  be  Included  in  account 
No.  311,  "  Miscellaneous  rent  Income." 

521.  Rents  from  Other  Operated  Property. 

This  account  should  include  all  revenues  accruing  as  rent  for  the  use 
by  others  of  lands,  buildings,  poles,  conduits,  and  other  proi>erty  except 
wires,  when  sach  property  is  used  also  by  the  conipany  and  the  exjiense  of 
maintaining  and  operating  the  rented  portion  can  not  be  separated  from 
the  total  expense. 

Note. — If  the  expenses  on  the  rented  property  can  be  ascertained,  the  rents 
received  and  the  expenses  In  connection  with  such  property  should  be  included  In 
account  No.  311,  **  Miscellaneous  rent  income." 


61 

822.  Monet  Transfer  Premiums. 

This  account  should  include  revenues  derived  from  premiums  on  money 
transferred  by  telegraph  or  ocean  cable. 

NoTB. — The  tolls  for  the  transmission  of  messages  incident  to  money  transfers 
•hould  be  credited  to  account  No.  604,  "  Money  transfer  tolls,"  or  to  account  No. 
610,  "  Commercial  cable  tolls." 

628.  Messenger  Service  Revenues. 

This  account  should  include  all  revenues  derived  from  messenger  service 
when  such  service  is  not  included  in  the  rate  charged  for  the  trans- 
mission of  messages. 

624.  Time  Service  Revenues. 

This  account  should  include  all  revenues  accruing  for  self-winding 
clock  and  other  time  service. 

625.  Otheb  Nontransmission  Revenues. 

This  account  should  include  all  nontransmission  operating  revenues  not 
provided  for  elsewhere.  This  includes  the  profit  on  condensation  of 
money-transfer  messages  for  transmission  by  wireless  and  ocean  cable. 

IV.  Contract  Payments  to  Transportation  Companies. 

OoNTBAOT  Revenues — Db. 

This  account  should  include  payments  to  transportation  companies 
covering  the  proportion  of  receipts  due  such  companies  under  the  pro- 
▼isioQS  of  operating  contractiL 


\i 


OPERATING  EXPENSE  ACCOTJNTS. 

I.  Maintenance. 

Page. 

600.  Supervision  of  Maintknanck 65 

601.  Repairs  of  Office  Equipment 65 

602.  Repairs  of  Aerial  Plant 65 

603.  Repairs  of  Underground  Plant 66 

604.  Repairs  of  Ocean  Cablx  Lines 66 

605.  Repairs  of  Buildings  and  Grounds 66 

606.  Testing  and  Regulating 66 

607.  Minor  Rents  for  Property iiQ 

608.  Depreciation  of  Plant  and  Equipment 06 

609.  Extraordinary  Deprecl/ition 66 

610.  Other  Maintenance  Expenses 66 

611.  Repairs  Charged  to  Reserves — Cr 67 

II.  Conducting  Operations. 

620.  Supervision  of  Operations 67 

621.  Operators 67 

622.  Telegraph  and  Cable  Office  Clerks 67 

623.  Messenger  Service  Expenses 67 

il24.  Operating  Power 67 

625.  Rents  of  Telegraph  and  Cable  Offices 68 

626.  Telegraph  and  Cable  Office  Stationery  and  Printing 68 

627.  Operators'  Schooling 6S 

628.  Rest  and  Lunch  Rooms 68 

629.  Miscellaneous  Telegraph  and  Cable  Office  Expenses 68 

630.  Obtaining  Stock  and  Commercial  News 68 

631.  Telephone  Company  Service 68 

632.  Commissions 68 

633.  Advertising  and  Souciting 69 

634.  Traffic  Damages 69 

635.  Other  Conductino  Operations  Expenses 69 

III.  General  and  Miscellaneous. 

640.  Salaries  of  General  Officers 69 

641.  Salaries  of  General  Office  Clerks 69 

642.  Expenses  of  General  Officers  and  Clerks 69 

643.  General  Stationery  and  Printing 69 

644.  Other  General  Office  Supplies  and  Expenses 69 

645.  General  Law  Expenses 69 

646.  Insurance 70 

647.  Accidbnts  and  Damages 70 

648.  Law  Expenses  Connected  with  Damages 70 

649.  Relief  Department  and  Pensions 70 

660.  Franchise  Requirements 71 

•61.  Valuation  Expenses 71 

662.  Amortization  of  Franchises  and  Patents 71 

653.  Other  General  Expenses 71 

664.  Franchise  Requirkments- Cr 71 

(03) 


TEXT   PERTAIXIXG   TO   OrERATTXO   EXPENSE   ACCOUNTS. 


I.  Maintenance. 

KOTC  Am.TCAm.F  to  An.  Matntfnance  Accounts. — Tf  n  oompnny  conducts  hotb 
tele^M'npli  hiiiiMiiH*  o|K*nition8  niiil  octniii  c^iltle  oiteralUuis.  eavh  of  the 
luiiiuiry  iii.'iiiiiciuiiiee  ex|ieiise  nccunnts  reliiUii};  to  boili  classes  of  openi- 
tuiis  >liniil(|  lie  sniullvitlpil  s<»  as  t«»  sliow  isepuiutely  the  exiwuses  for 
each  of  the  two  classes  of  oiieratlous. 

COO.  Sui'KKvisioN  OF  Maintenance. 

Tills  account  should  Ineiude  the  pny  nnd  office  and  traveling  expenses 
of  oHicors  and  their  assistants  when  dlrectlj*  hi  charge  of  innlntenancc^ 
including  general,  division,  nnd  district  fjlant  superintendents,  engineers, 
an*hitects.  nnd  tlieir  ottice  and  field  forces,  but  not  including  foremen  and 
«i|»erlntendent8  of  repair  gangs;  also  that  jwrtlon  of  the  sjilarles  and 
exitenses  of  the  general  eugiueeriug  staff  of  the  company  which  is 
assignable  to  ninintennnce. 

It  should  ailso  include  the  cost  of  repairs  of  drafting  nnd  engineering 
Instruments  and  the  original  cost  of  such  instruments  as  are  not  properly 
chargeable  to  the  |»Iaut  nnd  equiiiment  accounts;  the  cost  of  otHce  nnd 
other  supplies  (including  postage,  stationery,  and  printing)  used  by  offi- 
cers and  employees  whose  salaries  are  charged  to  this  nccount ;  rent  nnd 
repairs  of  rented  offices;  nnd  janitor  service,  light,  heat,  nnd  miscel- 
laneous office  expenses  where  separate  offices  are  maintained  for  such 
emiiloyees. 

601.  ItEPAiKs  or  Office  Equipment. 

This  account  should  Include  the  cost  of  repairs  of  telegraph,  messenger, 
or  cable  etpiipment  in  main,  local,  branch,  or  relay  telegraph  or  cable 
offices  or  on  sul)scrlbers'  premises.  It  Includes  the  cost  of  repairs  of 
ehH'trlcal,  mechanical,  or  lateumatic  equipment  in  oliiccs.  such  as  distrlb- 
mlng  frames,  switchboards,  and  testing  apparatus;  keys,  relays,  and 
siMniders;  operating  tables;  nutomntic  transmitting  and  receiving  appa- 
ratrs;  duplex,  quadruplex,  and  repeater  apparatus;  engines,  generators, 
batteries,  air  compressors,  nnd  other  i>ower  equipment;  pneumatic  tubes 
In  telegiai)h  offices  and  other  automatic  message  conveyoi*»;  interior 
wiring,  cabling,  and  conduits;  also  the  cost  of  repairs  of  cjill  registers, 
call  boxes,  nnd  nccessories;  and  of  office  furniture  uud  other  equipmeut 
of  telegraph  and  cable  offices. 

C02.  Repairs  of  Aebial  Tlant. 

This  account  should  include  the  cost  of  repairs  of  telegraph  plant 
classe<l  as  aerial  plant,  such  as  iw'es,  towers,  cross  arms,  pins.  braclc> 
ets.  and  other  pole  fixtures;  braces,  guy  wires,  guy  stubs,  nnd  other  pole 
8U|iports;  aerial  cables,  and  the  susi)enslon  wires,  bolts,  clamps,  rings, 
bangers,  etc.,  used  to  attach  cables  to  poles,  towers,  or  other  supports; 
cable  l)oxes  and  their  appurtenances;  and  aerial  wires,  tie  wires,  insu- 
la  tors,  and  sleeves.  It  Includes  also  the  cost  of  trimming  trees  and  clear- 
ing and  removing  obstructions  from  right  of  way  for  aerial  plant,  other 
than  the  first  cost. 

NoTB. — Thr  cost  of  flrpt  '•loarlnir  of  ri^ht  of  way  for  aerial  plant  is  prorided  for 
In  plant  and  (K)uipment  account  No.  21 1,  **  Pole  lines.** 

65922'*— 1.3 5  (05) 


C6 

003.  Retatrs  of  Uttdercrouwd  Plant. 

Tbis  ncconnt  should  include  the  cost  of  repnirs  of  tolcprnph  plnnt 
cinssed  ns  underground  plnnt,  such  ns  underground  conduits  and  their 
appurtennnres;  outside  pneumatic  tubes  nud  their  appurtenances :  nn«ler- 
ground  cables,  Eubniarlne  telegraph  cables,  and  towers,  boxes,  nnd  fittings 
belonging  to  such  cables.  It  Includes  also  the  cost  of  repairing  right  of 
waj-  for  underground  and  6ul)niariue  cables,  and  the  cost  of  repuviii];  after 
repairs  of  underground  conduits. 

C04.  Repairs  of  Ocean  Cable  Lines. 

This  account  should  include  the  cost  of  repairs  of  ocean  cable  lines, 
and  of  aerial  and  underground  cables,  conduits,  pole  line,  and  wires,  and 
their  appurtenances,  used  exclusively  in  the  oi)eratlon  of  oce.m  cables. 

This  account  may  include  each  month  a  proportion  of  tlie  total  amount 
authorized  or  appropriated  for  ocean  cable  repairs  during  a  term  of  years 
regardless  of  the  mouth  in  which  the  actual  repairs  are  made. 

COS.  Repairs  of  Buildings  and  Grounds. 

This  account  should  include  tlie  cost  of  repairs  to  the  stnictnres  and 
permanent  fixtures  of  general  and  division  offices;  of  mala,  local,  brancli, 
or  relay  telegraph  and  cable  offices  and  test  stations;  nnd  of  storehouses, 
shops,  stnbles,  and  garages,  such  fixtures  including  elevators,  plumbing, 
and  plaats  for  heat,  light,  ventilation,  nnd  power,  but  not  including  tele- 
graph or  cable  apparatus.  This  account  should  Include  also  the  cost  of 
maintaining  jards  and  grounds,  with  their  fences,  sidewalks,  sewers, 
etc.,  appurtenant  to  such  buildings. 

COG.  Testing  and  Regulating. 

This  account  should  include  the  pay  and  expenses  of  wire  chiefs,  test- 
Iward  chiefs,  repeater  chiefs,  multiplex  chiefs,  and  their  as.slstanis. 
engaged   in   interior  testing  and  ptitching  wires,  and  in  watching  and 

regulating  the  oi)eration  of  repeater  and  multiplex  apparatus. 

» 

007.  Minor  Rents  for  Property. 

This  account  should  include  amounts  payable  for  rents  of  wires,  dncta, 
conduits,  lands,  pole  lines  and  other  supports  for  wires,  and  other  prop- 
erty, when  rented  for  one  year  or  less. 

NOTK. — Rents  for  similar  property  when  lensed  for  more  than  one  year  should 
be  charged  to  account  No.  321,  "  Miscellaneous  rents." 

COS.  Depreciation  of  Plant  and  Equipment. 

This  account  should  include  monthly  the  amount  estimated  to  be  nccea- 
sary  to  cover  the  depreciation  accruing  during  the  month  in  the  com- 
pany's tangible  plant  and  equipment,  except  tliat  provided  for  in  the 
dealing  accounts.    (See  sec.  21,  p.  10.) 

NoTK. — Amounts  charged   to  this  account  should   l>e  concurrently   credited   %m 
account  No.  170,  "  Ueserve  for  accrued  depreciutlon." 

009.  Extraordinary  Depreciation. 

This  account  should  be  charged  monthly  such  an  nmonnt  ns  will, 
through  Its  regular  application,  amortize  the  amount  carried  In  suspense 
on  account  of  extraordinary  casualties  and  unanticipated  rcconstructioa 
(See  sec.  22,  p.  17.) 

610.  Other  Maintenance  Expenses. 

This  account  should  Include  the  cost,  when  not  provided  for  elsewhere, 
of  repairing  telegraph  and  cable  pUint  and  equipment 


■4     !•♦ 


G7 

611    Repairs  CnARCFD  to  Rfrerves — Cr. 

Credit  to  this  account  nnd  charge  concurrently  to  accnnnt  Xo.  170, 
"Reserve  for  accrutni  depreciation,"  an  amount  equal  to  the  cost 
of  extiaiordlnaiy  repairs  for  which  provision  lias  been  made  in  ihat 
reserve;  also  credit  to  this  account  and  charge  concurrently  to  the 
Insurers  or  to  the  insurance  reserve  an  amount  equal  to  the  c-ost  of 
repairs  made  necessary  by  casualties  when  such  cost  is  covered  by 
Insurance  or  uu  Insurance  reserve.     (See  sec.  19,  p.  15.) 

II.  Conducting  Operations. 

KoTE  APPMCAm-E  TO  ALL  ACCOUNTS  IN  CONDUCTING  OPERATIONS. — Tf  a  Company 
conducts  both  telegraph  land-Hue  operations  and  ocean  cable  oper.iti«»ns, 
e:ioh  of  the  |>rlmary  expense  accounts  under  the  head  of  coudtuMliig 
Operations,  when  relating  to  botii  classes  of  operations,  should  bi»  soIh 
dixided  so  as  to  show  separately  the  expenses  for  each  of  the  two  classes 
of  o])eratious. 

020.  Supervision  of  Operations. 

This  account  should  include  the  pay  and  expenses  of  officers  and  their 
assistants  when  la  charge  of  connnercial  and  traffic  departments:  the  pay 
and  expenses  of  their  office  and  field  forces;  cost  of  oHice  and  other  sui)- 
plles  (Including  postage,  stationery,  and  printing)  used  by  officers  nnd 
employees  whose  salaries  are  charged  to  this  account;  rent  nnd  cost  of 
repnlring  rented  offices,  janitor  service,  light,  heat,  and  miscellaneous 
office  expenses,  If  separate  offices  are  maintained  for  such  officei*s  and 
•uiployees. 

This  account  should  Include  the  entire  pay  of  managers  and  chief 
operators  who  are  engaged  exclusively  In  the  supervision  of  commercial 
and  tniffic  matters. 

621.  Operators. 

This  account  should  include  the  pay  of  operators  ond  attendants  in 
main,  local,  branch,  or  relay  offices  engaged  in  the  transmission  of  mes- 
sages; also  commissions  paid  in  lieu  of,  or  in  addition  to,  .salaries. 

This  account  may  include  the  entire  pay  of  managers,  chief  oi>erator8, 
and  operators  who  are  engaged  principally  in  the  thmsniission  of 
messages  and  are  engaged  only  Incidep.tally  In  performing  other  duties. 

622.  Telegraph  and  Cable  Office  Clerks. 

This  account  should  include  the  pay  of  bcolikeei)er8,  clerks,  and  at- 
tendants engaged  In  receiving  and  delivering  messages  at  counters,  quot- 
ing nites,  collecting  charges,  keeping  accounts,  and  performing  other 
clerical  duties  in  telegraph  or  cable  offices. 

623.  Messenger  Service  Expenses. 

This  account  should  Include  the  pay  and  expenses  of  messengers  en- 
gaged In  the  colleitlon  and  delivery  of  messages  and  in  the  performance 
of  other  messenger  service  for  which  collection  Is  made  by  the  company; 
also  the  cost  of  repairs  to  messengers'  uniforms,  when  borne  by  tiie 
company. 

To  this  account  should  be  credited  rents  received  by  the  company  for 
nse  of  messengers'  uniforma 

624.  Operating  Power. 

This  account  should  include  the  cost  of  generating  power  for  the  opera- 
tion of  telegraph  and  cable  wires  and  accessory  apparatus,  the  cost  of 
supplies  used  In  operating  power  plants,  the  cost  of  battery  soluUon  and 
materials,  and  the  cost  of  purchased  power. 


68 

625.  Rents  of  Telecbaph  and  Cable  Offices. 

Tbis  nccount  should  Include  nniounts  nccrued  pnynble  ns  rent  of  looa! 
telegraph  and  cable  offices.  Including  furnUhed  Janitor  service,  light, 
Lejit,  and  uuilnteuance  covered  by  the  rent  imyuients;  also  the  cost  of 
repali-iuR  rented  telegraph  and  cable  offices  when  repairs  are  borne  bj 
the  lessee. 
G2C.  Telegraph  and  Cable  Office  Stationebt  and  rBiNxiNo. 

This  account  should  Include  the  cost  of  iwstage,  stationery,  stationery 
supplies,  and  printing  used  hi  telegraph  or  cable  offices. 

C27.  Operatobs'  Schooling. 

This  account  should  Include  the  cost  of  training  new  operators,  either 
In  school  or  otherwise.  Including  wnpes  paid  them  for  which  no  service 
Is  rendered,  salaries  and  expenses  of  Instructors,  and  cost  of  supplie* 
furnished  to  schools  for  operators. 

C28.  ItEST  and  Lunch  Rooms. 

Tills  account  should  Include  the  cost  of  conducting  rert  and  Inncb 
rooms  for  the  operating  force,  including  th-3  cost  of  lunches  furnished. 

To  this  account  should  be  credited  amounts  received  by  the  company  for 
lunches  served. 
029.  Miscellaneous  Telegraph  and  Cable  Office  Expenses. 

This  account  should  include  the  traveling  expenses  of  managers  and 
chief  operators  whose  pay  Is  chargeable  to  account  No.  G21.  and  of  oper- 
otors.  clerks,  and  attendants  employed  In  main,  local,  branch,  or  relay 
telegraph  and  cable  offices;  the  cost  of  office  supplies  not  properly  charge- 
able to  the  plant  and  eqnli)uie:it  accounts,  and  not  provided  for  In  account 
Ko.  C2G;  the  cost  of  water.  Ice.  fuel,  light,  towels,  toilet  supplies,  and  of 
Janitor  service  and  other  care  of  main,  local,  branch,  or  relay  telegraph 
ond  cable  offices. 

630.  Obtaining  Stock  and  Commercial  News. 

This  account  should  Include  all  expenses  Incident  to  the  gathering  of 
Infoiniation  relative  to  stock  and  other  market  quotations,  transiictions 
in  securities,  siwrtlng  news,  election  returns,  marine  reports,  and  similar 
Items  subsequently  disseminated  as  stock  and  commercial  news. 

631.  Telephone  Company  Service. 

This  account  should  Include  amounts  accruing  to  telephone  companies 
for  services  rendered  by  employees  of  telephone  companies  In  Joint  offices, 
»uch  as  receiving  messages  from  the  public,  delivering  messages  to  the 
public,  quoting  rates,  collecting  charges,  and  making  rei>orts;  also 
amounts  due  la  the  form  of  commissions  or  otherwise  to  telephone  com- 
panies for  collecting  charges  at  other  than  Joint  officea 

jitYTK. — Amountg  due  telephone  companies   for   transmisMon   of  mes^agefl  OTer 
their    wirea   ahould   be   charsed    to   account    No.    GOT,   **  Telephone    tranamlssioa 
tolls— Dr." 
2,  Commissions. 

This  account  should  Include  commissions  for  originating  or  handling 
messjiges  or  for  other  commercial  service  connected  with  revenue  mes- 
sages, when  payable  to  Individuals  not  employees  of  the  company,  sncb 
as  of>erators  employed  by  transportation  companies,  and  when  payable 
to  concerns  other  than  telephone  companies,  such  as  hotels,  stores,  and 
apartment  houses. 

Norr.— Commiwlona  paid  employees  In  lien  of  or  In  addition  to  talarlea  ahonid 
Se  changed  to  the  salary  accounts  appropriate  to  such  eniployeea.  CommlsRlnna 
paid  to  prrsona  conducting  telephone  operatlona  abould  bt  cktarged  to  account  N«» 
631,  *' Telephone  company  aerTice." 


'■♦ 


C9 

633.  iDrFRTismo  and  Roltcittno. 

This  account  should  Include  the  pay  and  expenses  of  advertising  and 
sollcliing  agriits;  cost  of  coiiiineivial  advertising  in  newspnpers  t»r  maga- 
i  eIiich:  and  cost  of  iiosters,  bulletins,  advertising  sundries,  booklets,  uud 

oilier   related   Items. 

634.  Traffic  Damages. 

This  account  should  Include  payments  made  In  settlement  of  damage 
claims  arising  out  of  delays  and  errors  in  service,  and  e.\|MMises  directly 
Incident  to  such  claims,  including  the  pay  and  expenses  of  wiinessus  in 
law  suits  Involving  such  claims,  but  not  including  law  exiieiises. 

NoTK  A. — Where  tplegraph  and  entile  tolls  are  refunded  under  a  claim  of  faltur* 
In  service,  the  auiuuuia  of  the  lolla  ahould  be  chart^ed  to  the  upprupriate  reveuue 
aiH'ouniM. 

N«nB  R. — Paymonts  on  nccount  of  injuries  to  persons  or  damage  to  property 
■bould  he  charged  to  nccount  No.  (MT.  ".\ccideDt»  and  damages." 

N«»TB  C — l«jiw  expensea  connected  with  the  defense  or  settlement  of  damnse 
rlainin  are  provided  fur  In  account  No.  G4S,  **  Law  expenses  connected  with 
damages." 

635.  Otiifr  Conductino  Operations  Expenses. 

This  account  should  Include  all  expenses  Incident  to  conducting  tele- 
graph and  cable  oiieratious  and  not  provided  for  elsewhere. 

III.  General  and  Miscellaneous. 

610.  Salaries  of  General  Officers. 

Tills  account  shot^Id  Include  the  salaries  of  the  ctnlnn.'vn  of  the  hoard, 
presl<le:it.  vice  president,  secretary,  treasurer,  comptroller,  general  audi- 
tor, general  manager,  general  superintendent,  and  other  officers  whose 
Jurisdiction  extends  to  the  operations  of  tbe  company  as  a  whole. 

C41.  Salaries  of  General  Office  Clerks. 

This  account  should  Include  the  salaries  and  wages  of  bookkeepers, 
paymasters,  cashiers,  clerks,  and  stenographers  employed  in  the  general 
offices,  except  as  provided  for  elsewhere. 

Gi2.  ExPENSKs  OF  General  Officers  and  Cifrks. 

Tills  account  should  Include  the  traveling  and  Incidental  expenses  of 
general  officers  and  other  general  office  employees,  except  as  provided  for 
elsewhere. 

643.  General  Stationery  and  Prtntinc. 

This  account  should  Include  the  cost  of  postage,  stationery,  and  print- 
ing for  use  In  general  offices,  except  as  provided  for  elsewhere. 

Oi4.  Other  liENERAL  Office  Supplies  and  Expenses. 

This  account  should  Include  the  cost  of  office  supplies  (other  than  post- 
age, st.il'onery.  and  printing)  ;  repairs  of  office  furniture;  replacements  of 
Mich  furniture  as  Is  not  chargeable  to  plant  and  equipment  accounts; 
wages  of  Janitors,  porters,  and  attendants;  rent  and  cost  of  repairs  of 
rented  general  offices;  and  other  miscellaneous  exi)euses  of  general  offices. 

643.  General  Law  Expenses. 

This  account  should  Include  all  law  expenses  except  those  Incurred 
In  the  defense  and  settlement  of  damage  claims,  including  pay  and 
expenses  of  counsel,  solicitors  and  attcrue.vs,  their  clerks  and  attend- 
ants, and  expenses  of  their  offices;  cost  of  law  books,  printing  briefs, 
legal  forms,  testimony,  reports,  etc.;  fees  and  retainers  for  services  of 


70 

W5.  Cfnfral  Law  ExrENSFH — Contlnned. 

ottnrne.vs  not  r^nilnr  omploj-ees;  conrt  costs  nnd  pnymentJ*  of  f«pec!nl. 
noUiHiil,  nnd  witness  fees  not  provJde<l  for  elsewliere:  exiienses  eon- 
nei'toil  with  tiilcini:;  depositions;  and  all  law  nud  court  expenses  not 
l>rovided  for  elsewhere. 

Note. — The  comprnsatlon  of  the  general  nollclfor  or  counsel  or  other  ittomejrt 
cnsa^od  partly  In  the  dofonse  or  settlomrnt  of  dntnace  suits  and  partly  In  other 
te^ral  work  slioiild  be  proprrly  apportioned  between  Ibis  account  and  account  No. 
6 IS,  "  Law  expenses  connected  with  damases.** 

MC.  Insukancf^ 

This  acconnt  should  include  premiums  pnii  to  Insurance  companies  for 
fire,  fidelity,  boiler,  casualty,  burglar,  and  other  insurance.  Charge  ailso 
to  this  account  and  credit  to  account  No.  1T3.  "Insurance  and  casualty 
reserves,"  amounts  set  aside  as  an  insurance  reserve. 

This  account  should  be  credited  and  the  plant  and  equipment  accounts 
charged  with  the  cost  of  insurance  aiipUctible  to  construction  work. 

Note. — In  reports  to  the  Commission  the  companies  will  be  required  to  report 
the  charges  made  to  this  account  for  the  various  kinds  of  Insurance,  and  for  self- 
Insurance. 

W7.  ACCIDFNTS    AND   DAMAGES. 

This  account  should  include  expenses,  other  than  law  expenses.  In- 
curred on  account  of  i^rsons  killed  or  injured  and  on  account  of  prop- 
erly of  others  damaged.  It  includes  the  pay  and  expenses  of  claim 
agents.  Investigators,  and  adjusters;  fees  and  exi)euses  of  surgeons  and 
doctors,  nursing,  hospital  attendance,  medical  and  surgical  supplies,  fees 
ond  expenses  of  coroners  and  undertakers,  and  contributions  to  hospitals; 
also  anjounts  paid  on  Judgments  and  other  settlements  of  i)ersoual  injury 
or  damage  claims. 

This  account  should  be  credited  and  the  plant  and  equipment  accounts 
charged  with  the  expenses  of  accidents  and  damages  Incident  to  construc- 
tion work. 

fCoTB. — Payments  made  in  settlement  of  damage  claims  arising  out  of  delay 
and  errors  In  service  should  be  charged  to  account  No.  C34,  '*  Traffic  damages." 

IMS.  Law  Ivxpensks  Connectfj)  with  Damaoks. 

This  account  should  include  law  expenses  connected  with  the  de- 
fense or  sett  lenient  of  damage  claims,  including  a  pror>er  proiwrtion  of 
the  salaries  and  expenses  of  the  general  solicitor  or  counsel;  of  salaries, 
fees,  and  expenses  of  attorneys  engaged  In  this  work;  fees  of  court 
stenographers  and  other  court  expenses;  and  cost  of  law  books,  printing 
briefs,  conrt  records,  and  similar  papers  in  connection  with  such  cases. 

This  account  should  be  credited  and  the  plant  and  equipment  accounts 
charjjed  with  law  expenses  incident  to  damage  claims  arising  out  of  con- 
struction work. 

pjnXK. — The  compensation  of  the  general  solicitor  or  counsel  and  of  other  attor- 
neys  engage<l  panly  In  the  defense  or  settlement  of  damage  suits  and  partly  In 
oilier  legal  work  should  be  properly  apportioned  between  this  account  and  account 
No.  G45,  •*  General  law  expenses." 

WO.  Kelief  Department  and  Pensions. 

This  account  siionlil  include  pensions  or  other  benefits  paid  to  em- 
ployees or  refiresentntives  of  former  employees,  and  expenses  In  connec- 
tion therewith;  salaries  and  expenses  incurred  in  conductUis  a  relief 
deyartmeut ;  and  contributions  made  to  such  department 


) 


71 

8S0.  FlANrnTSlC  TTFQUntFTlfFNTS. 

Tills  nw-oiint  should  Include  the  cost  of  service,  mntorlals.  and  snp- 
plies  furnished  to  municipal  corporations  in  compliance  with  franchise 
nHiulrenients  and  for  which  no  payment  is  receivtHl  by  the  company;  also 
direct  exr>ense,  such  as  iwiving  and  other  like  matters,  incurred  in  coin- 
Iiliaiice  with  such  requirements  and  for  which  no  reimbursement  U 
received  by  the  company. 

^orr..— Amounts  charged  to  this  acconnt  for  which  there  Is  no  direct  money 
outlay  should  be  credited  to  account  No.  Oo4,  "Franchise  requirements— Cr." 

C51.  Valuation  Expenses. 

This- account  should  Include  expenses  Incident  to  the  ascertainment 
(In  nc-cordance  with  the  act  to  regulate  commerce  as  amended  March 
1.  ll)i;i.  or  with  other  Fcnlerai  or  State  requirements)  of  the  value  of 
p'ro|.ert'y  owned  or  used  by  the  accounting  company,  such  expenses  in- 
cluding r»ay.  and  office,  tniveiing,  and  other  expenses  of  officers  specially 
enii»ioved  or  assigned  to  such  work,  and  of  their  assistants,  clerks,  and 
attendants,  and  the  cost  of  stationery  and  printing,  and  of  engiut-Pring 
Buiiplies  consumed. 

Note  A.— No  charge  should  be  made  to  this  acconnt  for  the  salaries  of  ,)fflrpr» 

or  uf  llulr  clerks  and  attendants  for  merely  Inrldnntal  servlo-s  In  connortion  with 

Talnatlon   work,  but  simh-IuI  office,  clerical,  traveling,  and   In.ldental  expanses  In- 

»  currwl  by  these  officers  un  account  of  such  work  may  be  Included  as  a  part  of  the 

cuHi  of  the  work.  ,.         .», 

Note  It.— It  Is  not  Intended  that  this  account  shall  in  any  degree  relieve  the 
Other  primary  accounts  of  expenses  ordinarily  chargeable  thereto  under  cenditluus 
existing  while  no  valuation  work  Is  In  progress. 

SC2   Amortization  of  Franchises  and  Patents. 

This  account  should  Include  each  month  the  amount  necessary  to 
cover  such  portions  of  the  life  of  limited  franchises  and  patents  as  have 
esi>ired  or  been  consumed  during  the  month. 

Kote— The  amount  charged  to  this  account  should  be  concurrently  cre<llted  to 
an  appropriate  subaccount  under  account  No.  171.  "  Kcscrve  for  amortlzaUoa  of 
in  tangible  capital." 

Co3.  Other  General  Expenses. 

This  account  should  include  such  incidental  general  expenses  as  are 
not  provided  for  In  the  foregoing  accounts,  such  as  cost  of  publishing 
not  lies  of  stockholders'  meetings,  of  elections  of  directors,  and  of  divi- 
dends declared;  annual  reports  in  newspai)ers;  fees  and  expenses  paid  to 
directors;  expenses  of  transfer  agents  and  of  listing  stocks  on  exchanges. 

CS4.  Fbanciiise  Requirements— Cr. 

Credit  to  this  account  the  amounts  included  in  account  No.  C50,  **  FraD- 
diise  leqniremeuis,'"  for  which  there  is  no  ucluui  money  outlay. 


TEXT  PERTAIXIXG  TO  CT^EARIXO  ACCOUNTS. 


ExFLATtATORT  NoTt — TTie  follon-lng  ncconnts  nre  provided  for  cerfnin  ^x- 
|KMi>es  whcli  usiuilly  jiffect  sevenil  cl.isses  of  opfnitionR  :\\u\  ium*«I  to  b« 
broiijrbt  logetber  in  one  jiccoiint  lu  order  Uiut  the  total  of  tlie  ejii»eusef 
u:aiy  be  kuowu  and  projierly  distributed. 

701.    SUOP    EXPKNSF, 

This  ncc-oiint  or  npproprlnte  subaccounts  should  be  nrrtinsed  ho  •■ 
to  record  sepamfoly  tlie  expenses  of  the  generni  shoiwi  ns  follows: 
(1)  Sniaries  and  wn^es  of  shop  employees:  (2)  personjil  and  incidental 
expenses  of  such  eniidoyees;  (U)  materials  and  supplies  for  penernl  sliop 
use;  (-1)  repairs  of  sbof)  tools,  machinery,  and  nppllnnccs:  (5)  deprecia- 
tion of  shop  tools,  mncblnery,  and  nppllnnces;  (G)  rents  paid  for  Kiiop 
buildings;  and  (7)  power,  beat,  light,  and  other  expenses  of  sliops. 

The  shop  expense  account  should  be  cleared  by  apiwrtlonlug  the  total 
amount  of  the  expenses  to  the  various  jobs  on  an  equitable  basis. 

TQ2.  Stable  and  Garage  Expense. 

This  account  or  appropriate  subaccounts  should  be  arranged  so  as  to 
record  gei»arately  the  exjienFes  of  stables  and  garages  as  follows:  (1 )  Sal- 
aries and  wages  of  drivers,  chauffeurs,  stablemen,  gnragemen,  anJ  otiier 
employees  In  stables  and  garages;  (2)  personal  and  incidental  exponsci 
of  such  employees;  (3)  materials  and  supplies,  including  fuel  and  gaso- 
line, feed,  harness,  tires,  and  other  supplies  for  stables  and  garages; 
(4)  repairs  of  automobiles  and  other  vehicles  and  harness:  (5)  depre- 
ciation of  vehicles,  horses,  harness,  etc.,  including  losses  unprovided  for 
by  reserves  or  insurance;  (0)  rents  paid  for  buildings,  vehicles,  and 
horses:  and  (7)  heat,  light,  and  other  exi»enj*e8  of  stables  and  gar.tges. 

Credit  to  this  account  any  charges  for  service  performed  for  others  bj 
the  accounting  com[)any. 

A  record  should  be  kept  of  the  use  of  teams  and  automobiles,  and 
tlie  amount  carried  in  tliis  account  should  be  apportioned  to  the  proper 
accounts  according  to  use.  or  tlie  debits  to  the  accounts  may  be  made 
at  rates  i)er  hour  of  service  which  have  been  found  to  be  fair  and  to 
distrii>ute  the  total  exi>euse  equitably. 

T03.  Tool  Expense. 

This  account  should  include  exf)ense  for  tools  other  than  shop  tools  and 
tools  carried  as  supplies  unissued,  including  (1)  the  cost  of  small 
Land  tools  of  which  no  account  is  kept  after  issue;  (2)  the  cost  of  re- 
pairing tools;  (3)  the  cost  of  tools  lost  or  stolen;  and  (4)  depreciation  on 
tools  taken  out  of  service  because  of  breakage  or  other  deterioration. 

This  account  should  be  cleared  by  adding  to  the  exi>ense  of  reitnln 
and  cost  of  pl.-uit  installed  such  amounts  as  will  equitably  distribute  tha 
total  expense  for  tools. 

701  Supply  Expknse. 

This  account  or  appropriate  subaccounts  should  be  arranged  so  as  to 
record  separately  the  expenses,  except  Insurance  and  taxes,  incurred 
directly  in  connection  with  the  purchase,  storage,  handling,  and  distri- 
bution of  materials  and  supplies  and  stationery,  as  follows:  (1)  The  IH17 
and  exi)euses  of   purchasing  agents,    managers   of   stores,   clerks,   aud 


) 


73 

TOl.  SfPFLT  Expense — Continued. 

lalNirers;  (2>  personal  and  Incidental  expenses  of  such  employees; 
<»)  rents  paid  for  storerooms  or  storehouses;  (4)  repairs  of  store 
equipment;  (5)  cost  of  lighting  and  heating;  (G)  undistributed  trans- 
I»ortation  charges;  (7)  discounts  recovered  through  prompt  payment  of 
biiJs  for  materials  and  supplies  when  such  discounts  can  not  be  assigned 
to  the  particular  bills;  (8)  overages  or  shortages  in  tlie  materials  and 
supplies  account  disclosed  by  Inventories  and  not  assignable  to  specific 
accounts;  and  (0>  the  estimated  depreciation  on  materials  and  suiipliea 
due  to  breakage,  leakage,  shortage,  and  wear  and  tear. 

This  account  should  be  cleared  by  adding  to  the  cost  of  materials  and 
supplies  passing  through  stores  a  suitable  loading  charge  wlilch  will 
equitably  distribute  the  total  cost  of  conducting  the  stores,  and  by  adding 
to  the  cost  of  such  supplies  as  are  bought  by  the  purchasing  department 
a  pro  rata  share  of  the  total  expense  of  the  purchasing  department. 

T05.  Encinfering  Expense. 

This  account  or  appropriate  subaccounts  should  be  arranged  so  as  to 
record  seimrately  the  ex|»ense8  for  engineering  as  follows;  (1)  Salaries 
and  wages;  (2)  personal  and  incidental  expenses  of  engineering  depart- 
ment employees;  (3)  rent  paid  for  offices;  and  (4)  light,  heat,  and  other 

ofllce  expensen. 

This  account  should  be  cleared  by  apportioning  the  total  expenses  to 
operating  expense  and  plant  and  equipment  accounts  on  the  basis  of 
service  rendered,  as  determined  by  the  actual  time  devoted  to  particular 
Jobs  or  on  an  equitable  basis  fixed  by  the  oflicers  of  the  company. 

706.  Plant  Supervision  Expense. 

This  account  should  Include  the  cost  of  general  supenlslon  of  the  main- 
tenance and  construction  of  the  plant  where  a  separate  department  of  the 
company's  organlzjitlon  is  charged  with  such  8ui)ervislon.  It  Includes 
the  pay  and  exi)enses  of  general  plant  superintendent,  district  plant 
auperlntendent.  plant  engineers,  othet:  plant  supervising  officers,  and  their 
office  and  field  forces,  charged  with  planning  for  and  superintending  the 
work  of  maintenance  and  plant  construction. 

This  account  or  appropriate  subaccounts  should  be  so  arranged  as  to 
show  in  detail  the  expenses  of  the  plant  supervision  department  as 
follows:  (1)  Salaries  and  wages;  (2)  personal  and  Incidental  expenses 
of  employees:  (3)  rent  paid  for  offices;  and  (4)  light,  heat,  and  other 
office  expenses. 

This  account  should  be  cleared  by  charging  directly  to  the  appro- 
priate accounts  such  expenses  as  can  be  allocated  to  particular  pieies 
of  work,  and  by  charging  out  the  balance  on  the  basis  of  labor  employed 
in  all  construction  or  maintenance  work  in  progress. 

jfOTB. The  pay  of  penoral  fori«mon  and  foromen  in  direct  charpe  of  jobs  should 

be  Included  in  the  cost  of  the  Job  and  not  charged  to  this  account. 

707.  House  Service  Expense. 

This  account  sljould  Include  the  expenses  pertaining  to  the  operation 
of  oUic-es  and  buildings,  wheiher  owneil  or  rented  by  the  company,  \tben 
such  expenses  can  not  be  allocated  as  they  accrue  to  the  operating  ex- 
pense accounts  and  other  accounts.  This  account  includes  rents  paid, 
fuel,  heat,  light.  iM>wer.  elevator  service,  janitor  service,  and  like  ex- 
|»enses,  but  does  not  include  insurance,  taxes,  and  maintenance  expenses. 

This  account  should  be  cleareil  by  apiK)rtlonlng  tlie  entire  expense  to 
the  operating  exiieuse  and  other  accounts  ou  the  basis  of  use  made  of 
Buch  property. 


?. 


If 


h 


74 

70S.  Floattng  EQumrENT  Expense. 

Clinige  to  this  aiccouiit  the  coPt  of  mnfntennnce  nnd  opemtlon  of  stenm. 
Bhlns.  stennibonts,  Uuinches,  mid  other  vessels  used  lu  the  imihiteiiaiice 
utu\  const  met  Ion  of  teleprnph  or  en  hie  Tnes. 

This  neeount  or  npin-oprinte  subneeounts  should  be  so  nrransed  ns  to 
show  in  detnll  the  expenses  of  flojirinff  equipment,  ns  follows-  (1)  Sjila- 
rlesnnd  wnpes;  (2)  i>ersonal  nnd  Ineldentnl  expenses  of  such  employees- 
(3)  nniteilnls  and  supplies;  (4)  reiwirs  of  ves.«els  and  .ippuiieuances' 
(i.)  depreciation  of  vessels  and  appurtenances;  (G)  rents  [lald  for  vessels;* 
(7)  other  expenses  of  operatln'j  ves.sels. 

Credit  to  this  account  any  charges  for  services  performed  by  the  com- 
pany  for  others. 

This  account  should  be  clejired  by  adding  to  the  exr>ense  of  repalm 
nnd  cost  of  plant  Installed  such  amounts  us  will  equitably  distribute  the 
total  expense  for  floating  equipment. 

TOO.  Railway  Equipment  Expknse. 

Charge  to  this  account  the  cost  of  maintenance  nnd  operation  of  motor 
bunk.  i)ole.  and  hand  cars.  velocl|»ede8  and  other  railroad  equipment  used 
iu  the  maintenance  and  construction  of  telegraph  lines. 

This  iiccount  or  approprhjte  subaccounts  should  be  so  arranged  as  to 
sliow  In  detail  the  expenses  of  railway  equipment,  as  follows:  H)  Sala- 
ries and  wjiges;  (2)  i)ersonal  and  Incidental  exi«n.«es  of  such  empl.iyees- 
(3)  materials  and  supplies:  (4)  repairs  of  ears  and  appuriemnues- 
(5)  depreciation  of  cars  and  appurtenances;  (0)  rents  paid  for  railway 
equipnent;  (7)  other  exi)enses  of  oiieratlug  railway  equipment. 

Credit  to  Uils  account  any  charges  for  services  performed  by  the  com- 
pnny  for  otliers. 

This  account  should  be  cleared  by  adding  to  the  expense  of  repalrt 
nn.l  cost  of  plant  iiiMalled  such  amounts  us  will  equitably  diairibuie  llic 
tiiiai  expense  for  ruilwuy  equipment. 


> 


INDEX. 


Roman  namerala  refer  to  the  general  Instnirtlom;  Arabic  numerals  to  the  several 

ac'coiintd. 


Abandoned  property.  *  (See  Retire- 
ment.) 

Aecidents.     (See  Casualties.  Dnmages.) 

Accounts  (pnyable)  ;  for  joint  opera- 
tions, xxlll:  with  other  coujinmies. 
150.  101;  audited  but  unpaid,  15U; 
miscellaneous.  102. 

Accounts  (receivable):  for  joint  oper- 
ations, xxlil :  Willi  other  companies. 
104.  112:  with  customers  and  jipents. 
111.  IW:  miscellaneous,  ll.'l:  reserve 
f<ir  doubtful  accounts,  172;  uucol- 
leetible.  304. 

Additions  to  property:  definition,  vil; 
nrMountlng  for  cost.  vli. 

Adv:inces:  to  other  companies  for  Ion? 
term.  1(14 :  to  employe  es  as  working 
funds.  lOS;  from  other  compMiiies 
for  long  term.  150;  from  customers 
for  service.  105. 

Advertising;  at  organization,  200; 
o|»erating  expense,  033. 

Aerial  piaut.  (See  Cables,  Pole  line. 
Wires.) 

Agents:  conimerclnl  ngents' collections 
100.  Ill ;  purchasing  ngents*  pny  and 
e.\|>en.««es.  2(>4,  2Mrt.  704:  advertising 
nnd  s<»llcltlng  ngents'  psiy  and  ex- 
penses. 033:  claim  ngents'  \y,\y  and 
expenses.  047;  transfer  ngents'  ex- 
ptMises.  (;r»3. 

Aniorti/.ntion:  reserve.  171:  of  debt 
discount  and  ex|>ense,  v.  325:  of  debt 
premium,  v.  327;  of  <u-gnniz!itlon 
costs.  414;  of  mlseellMueous  intangi- 
bles. 414:  of  cxtnuu'dinnry  losses 
nnd  expenditures.  x.xll.  OOJI;  of  frau- 
chise  nnd  patent  costs.  (J52. 

Appraisal  of  plant  ncquired,  xl.  20.""^. 

App»'«Pi*Jj»t*w^s-  (See  income,  Sur- 
plus.) 

Assessments  (for  public  Improve- 
ments) ;  benetitlng  right  of  wny. 
2<)4:  Iienetlilng  Innd,  205;  during 
c>»nstructlon  period.  2.*12n. 

Assessments  (on  stockholders) :  ns- 
gignnble  to  discount  and  premium 
nccount,  I  v.  IfiOn. 

Asseets:  contingent,  vl;  actual.  (See 
nnlnnce  sheet.) 

Automobiles.     (See  Vehicles.) 

( 


Ba^ance-Rheet  nccounts;  definition.  I: 
npset  side.  10()-12S:  liability  side, 
150-179:  adjustments  and  cancella- 
tions. 4(11.  417. 

Betterments;  definition,  vll :  account- 
ing for  cost,  vii;  ai»i)ropriations,  332, 
415. 

nilis:  receivable.  110;  paynble.  15S. 

Bonds.     (See  Fumlwl  <lcbt.  Securities.) 

I^ook  value  of  securities  owne<l.  ii. 

Buildings;  not  used  in  o|K?r:itlons.  10.1; 
ncquired  incidentally  with  land, 
205n:  used  In  oi)erntlons.  203;  iier- 
mnnent  fixtures.  20:»,  220n;  mnln- 
tenance  while  leased,  311;  repairs, 
005;  expense  of  operntion.  707. 

Cal)le  me.ssnge  revenues:  of  telegraph 
companies,  .''•O1-504;  of  cable  com* 
pr'ules.  510-513. 

Cables  (of  cnble  lines)  ;  Interior  cnble, 
220;  J  erial,  submarine,  nnd  under- 
ground cnble,  222;  interior  cable  re- 
pairs. 001  ;  aerlnl,  subiuMrine,  and 
underground  cable  repilrs.  G04. 

Cables  (of  telegrnph  lines)  ;  Interior 
cable.  207:  snbscrlbeis'  cMble,  210; 
aerlnl  cnble.  212;  under^'round  c.ible, 
215:  subnin Hue  cnble,  210:  interior 
nnd  subscribers'  cable  repairs.  001 ; 
nerini  cnble  repaiis,  002;  under- 
ground nnd  submarine  cable  repiiirs, 
003. 

Capitnl  stock:  linbillty,  150.  151.  152; 
cl.isses  of  Issues.  l."U:  entry  of  ctui- 
sitlernfion  recei\ed.  150:  delnition 
of  ••  Lssped "  and  **  (»ut standing.** 
]."0n:  subscription  ex|H?nse.  2(M); 
issue  expense.  2(M);  listing  expense, 
0.":j.     (See  :'lso  Securities.) 

Cars.     (See  Itniiwny  equipment.) 

Cnsh;  in  hniul.  10(>;  in  transit.  100; 
in  special  deposits.  107:  in  reserve 
funds,  lis.  110;  in  provident  fumLs, 
120:  deiJoslteil  by  customers,  llX); 
refunded  to  customers.  1(H). 

Casunltles:  reserve.  173:  extraordl- 
nnr.v.  xlx.  xxil,  000;  other,  ('►47. 

Clnlms;  In  fnvor  of  company.  113;  for 
tr:itfic  damages.  o:U:  for  personal 
Injury,  047;  fur  property  duniui;efl, 
047. 

5) 


76 


3 


^    - 
.( 

I 


ClenHnjr  ncoonnta:  debit  bnlnnoea 
VJl;  credit  luiljinoes,  170:  Inclusion 
of  siiiiill  items,  2l»«u;  lu  detail,  7ul- 
709. 

Clericjil   expense.      (See  Pay  and  ex- 

l)enst*s.) 
Collectors'  bnlam-es  receivable.  111. 
Connneivial    news    service;    revenues, 

fiU."):  ox  I  tenses.  (I'^O. 
Conniit*ici;ii   r:ite  messages:  telejrrnpb 

revLMiue,    500,    001;    cable    revenue. 

nio. 

Cuninilsslons:  for  ninrketlns  debt  se- 
ciirhles.  v:  in  lieu  of  or  addition  t<» 
8:iliirles.  xvlil.  G21  :  to  telephone 
conip.inles,  xvlll,  (Wl;  to  agencies 
and  otiiers,  xvlll,  032. 

Condeninntlon  costs.  204.  20.1. 
Conducting   oiieralious   expense,    C20- 
orir.. 

Conduits  (of  cable  lines) :  Inteiior. 
220:  underjrround.  222:  nialntennnce 
Willie  lejise<l,  311:  Interior  conduit 
rep.iirs,  tMJl ;  underground  conduit 
repnlrs.  004. 

Condidis  (of  tele?rnph  lines)  ;  inte^ 
rior.  207:  subscribers'.  210;  under- 
pnumd.  214:  nuiintenance  while 
le;'se«l,  311:  Interior  and  subscrib- 
ers' conduit  rei):iirs,  (JOl ;  under- 
ground conduit  rep.iirs.  003. 

Construction;  work  in  progress,  102: 
charjres  at  completion.  102;  grams 
re<elved  In  aid.  103;  appropriations. 
3.*!2.  410:  |>relindnjiry  ch.irges  to  o|>- 
en.tion.  G4IMMS:  charges  to  clearing 
accounts.  701-700.  (See  also  riant 
and  cqulinncnt.  Keconst ruction.) 

Contingent  jjssets  and  liabilities,  vl. 

Contrnct  revenue  debits.  030. 

Contributions:  to  provident  funds. 
120;  to  reimburse  losses  of  others, 
320:  to  hospitals,  (>47;  to  relief  de- 
partment. Vt4U. 

Conversion  of  securities,  101. 

Cost;  charges  for  securities  ownefl. 
il:  ch.irges  for  property,  vill.  x:  of 
labor,  x:  of  materials  and  supplies. 
X  :  in  excess  of  structural  value,  xi ; 
of  reprilr.s,  xx. 

Court  expen.se.     (See  Law  expense.) 

Current  assets;  miscellaneous,  110; 
detinltion.  110. 

Current  funds  assets.  108. 

Current  liability,  nd  seel  la  neons.  100. 

Customers'  accounts;  balances  receiv- 
able, 111:  de])osits  made,  100:  serv- 
ice billed  In  advance.  100. 

Dam.iges:  adjustment  of  charges,  173: 
abutting.  200:  traffic.  034:  to  proi»- 
erty.  047;  based  on  personal  injury 
047:  law  expense.  048. 

Debentrres:  stock  Hablllt.v.  100:  bond 
liability,  104;  Interest  accrued,  1(J3. 
313,  322. 


Debt  discount.     (See  Discount.) 

Delit  expense:  definition,  v;  account- 
ing. \:  un;imortlz«*d  balance.  12ti; 
for  construction  period,  Ix,  2211; 
anmrtlzjitlon  charges,  v.  320.  417. 

Deferred  ndscellaneous  items;  debits, 
127:  credits.  170. 

De'osits:  current  cash,  100:  for  spe- 
cial puriJoses,  107;  with  sinking 
lund  mi-siees,  lis;  by  customers, 
100. 

Depreciation:  of  security  values,  II; 
for  property  retlreil.  xli:  for  ex- 
traordinary repairs,  xlx :  deHnltion, 
xxl;  fixing  of  rates  nnd  ch.irges, 
XX I;  covered  by  reserxe.  xxl.  liO: 
not  covered  by  reserves,  xxl  413:  of 
I»lant  and  equipment,  xxl,  OOS;  for 
extr.iordinary  losses,  xxll.  WKl;  pre- 
llndnary  charges  to  clearing  ac- 
counts, 701-704.  70S.  70r). 

DIitH.tors*  fees  and  ex  reuses,  00.T 

Discount  (ndscellaneous)  :  on  bills  for 
materials  and  supplies.  llOn.  704; 
on  securities  of  other  companies.  :^l 3, 
314;  on  short-term  notes,  313.  32:{. 

Discount  (on  capitnl  stock):  detlnl- 
tlon.  Iv;  accounting.  Iv:  exclusion 
from  Investment  and  o|ienitlon.  Iv; 
unextinguished.  125;  rectird  entry  iu 
stock  account.  lOO;  adjustment  cred- 
its at  reacquirement.  III.  401 :  ex- 
tinguished  through  profit  :ind  loss. 
417. 

Discount  (on  funded  debt):  defini- 
tion, v;  accounting,  v;  e.xcluslon 
from  Investment  and  operation,  v; 
unamortized.  120;  record  entry  on 
debt  account.  104;  for  construction 
period.  Ix,  220;  amortizillon  ihrongh 
income,  v.  320;  adjustment  crwilts 
at  reacquirement.  ill.  401  ;  :Mnortized 
tbronirh  profit  and  loss.  v.  417. 

Dividends  (on  company  stock  owne<l)  ; 
exclusion  from  dividend  acriumts, 
312n.  3:^ln,  412u;  assigned  to  reserve 
funds.  SCO.  411. 

DlvldeiKls  (pay.ible) ;  deposits  to  meet 
p.nyments.  107;  due  but  unpvid,  103; 
declared  but  not  due.  lOS:  p.iyable 
by  lessee  for  lessor.  310.  320;  .Mpfuo- 
priations  from  Incone.  331  ;  apiao- 
prlat'ons  from  surplus,  412;  publica- 
tion expense.  G.'i3. 

Dividends  (receivable);  due  but  uiv 
collected,  114;  declared  but  not  due, 
117;  accrued  mider  contracts.  117; 
receivable  as  In'»onie,  312:  receivaible 
rs  fund  i'ccret'ons.  312u,  330. 

Drafts.     (See  Bills.) 

Ducts.    (See  Conduits.) 

Kngineering  exi)eifse:  for  construction 
In  progress.  102:  held  In  snsj»ense, 
127;  for  construction  |)erl<Hl.  SiO; 
for  maintenance.  000:  for  vniuatiuil, 
001;  iu  clearing  account,  7U0,  7oa 


77 


I 


) 


EnffincerInc  Instrnments;  cost.  230. 
<MK»:  repairs.  (MM). 

Eqtdpmcnl :  tninsmlsslon  term'nals, 
207.  2*J0:  messenger  service  equip- 
ment. 20S:  ofli  -e  business  cqnlpmeiU, 
2(K).  221.  224:  subscribers'  tele?:raph 
ci|uipment.  210;  floating  equipment. 
218.  *223:  railway  equipment,  210; 
shop  equipment.  220;  store  equr.)- 
ment.  220:  stable  .-nd  garage  eqnliH 
ment,  227;  8i)ecial  Items  of  e(pdi»- 
nient.  233;  appropriations,  332.  410; 
depreciation,  xxl.  (>08. 

Expenses.  (See  Debt  expense.  Operat- 
ing expenses.  Pay  and  expenses.) 

Fines  uuMald.  107. 

Fhaithig  equipment:  expense  for  con- 
struction In  progress.  102:  Invest- 
ment for  telegraph  lines,  218;  In- 
vestment for  cable  lines.  223;  ex- 
pense In  de.irlng  account.  708. 

Franchise:  recounting  for  extensions, 
vli;  amortization  reserve.  171;  cost 
of  requirement  or  extension.  201 ; 
■hort-term  rights,  201n:  pnyment  In 
ex<ess  of  first  cost.  201  n:  reqnlre- 
BJents  chargeable  as  taxes.  300:  re- 
quirements chargeable  as  operating 
expense,  GOO;  amortization.  002; 
credits  to  operating  expense,  (»04. 

Fuel.     (See  Supplies.) 

Funde»l  debt;  issue  and  sale  expense, 
v:  liability,  104;  classes  of  Issues. 
l.'»4;  entry  of  consideration  received. 
1.04 ;  definition  of  "  Issued "  and 
*•  outstanding."  l.>4n;  matured  but 
unpaid,  1('»4;  drawn  for  redemption 
but  uni)aid,  104.  (See  also  Secu- 
rities.) 

Fund.s.  (See  Current  funds.  Deposits. 
i:eserve  funds.  Trust  funds,  Work- 
ing funds.) 

Furniture:  Investment  for  offices.  209, 
221.  224:  malnienance.  001.  044. 

Gnr.'ges:  land,  200;  buildings.  200; 
e<p»lpment,  227;  building  rei)alrs. 
000:  expense  In  clcMrlnir  account. 
702:  service  for  others,  702. 

General  expense;  for  construction  In 
progress.  102:  assignable  to  plant 
and  equipment,  233;  for  operation. 
(W0-C04. 

Gifts.     (See  Contributions.  Grants.) 

Governnient  rate  messages;  telegraph 
revenue.    000,    002;    cable    revenue. 


010. 


Oil. 


Grading:  of  land,  200;  of  grounds, 
200:  1  ssessments.  2.*^2n. 

Grints  In  aid  of  construction.  1.T3. 

Gnnmds;  Investment,  200;  mainte- 
nance, 005. 

Horses ;  Investment,  227 ;  depreciation, 
702. 

Hospital  a.«»socIntIon  funds;  asset  bal- 
ances, 120;  llubility,  174.  (See  also 
Belief.) 


Hospital  contributions  by  company, 
047. 

House  service  expense  clearing  ac- 
count. 707. 

Tnccnie:  definition  of  account,  xiil:  In- 
>ested  since  1013  In  pl.ujt  and  eqniiv 
nient,  170;  temporary  appropria- 
tiouji.  17Cn:  reserveil  In  sinking 
funds.  177.  178:  held  In  miscellane- 
ous reserves,  178:  intended  for  in- 
vestment In  i)lant  and  eqni undent. 
178:  operating  Income.  300-SOO; 
nonoperatlng  income,  310-310;  de- 
ductions from  income.  304n,  320- 
328;  appropri.-itions  of  lncon»e,  330- 
'333;  income  balance,  400,  410. 

Incorporation  expense.  2U0. 

Injury  to  i)ersons.  (See  Personal  in- 
jury.) 

Inspection  of  materials  and  supplies,  x. 

Insurance;  fund  assets.  110:  premi- 
ums prepaid,  123:  reserve.  173.  040: 
insnr.ince  recoveiable.  173.  Oil;  iire- 
ndums  during  construction.  23.3» 
040:  charges  against  reserve.  Oil; 
credits  to  operating  expense.  Oil; 
premiums  p:>id.  (340. 

Intang  ble   capital;    replacement.    vIl; 

excess  cost  of  tangible  property,  xi; 

amortization      reserve,      171  :      cost 

cl:ar?es,       2(X)-203:        ."mortizn^ion 

through  profit  and  loss.  414;  amorti- 

z- tlon    through    operating    expense, 
r-o 

Interest  (on  company  debt  held)  :  ex- 
clusion from  Interest  Income.  31.3n; 
exclusion  from  Interest  dejlnffons, 
32'2n :  assigned  to  reserve  funds.  330. 

Interest  (pry  ble)  :  for  construction 
perlofl.  Ix.  102.  220;  dPiwsits  to  meet 
payment  107:  related  to  debt  dis- 
count and  premium,  v.  1.04:  on  re- 
ceiver's certificates,  1.'.'.  322;  on 
judgments,  107:  matured  but  unpaid, 
103;  on  unmatured  funded  debt,  103, 
108.  :V22:  on  matured  funded  debt. 
103.  lOS,  323:  on  unfunded  debt  .-Mid 
open  accounts.  103,  lOS.  ;i23:  by  les- 
see In  lessor's  beludf.  310,  320;  on 
on  debenture  stock.  322. 

Interest  (receivable)  ;  matured  but  un- 
collected. 114;  accrued  but  not  due. 
117;  accrued  during  construction, 
220:  receivable  sis' income.  313:  ac- 
crued to  reserve  funds.  .3i:}n.  .'i,30. 

Inventory:  balances,  110;  overages 
and  shortages,  110.  704. 

Investment;  In  plnnt  and  equipment. 
100.  101 ;  In  construction  in  progress. 
102:  In  securities.  103:  In  long-term 
advan-'es,  104;  In  property  not  used 
in  operations.  100:  profit  from  sale. 
401 ;  loss  by  sjile  or  retirement.  417. 

Janitor  service.  (See  House  service,. 
Office  expenses.) 

Joint  operations  expense,  xxUL 


78 


'!r' 


h 


Jud;nnents;  in  fnvor  of  company,  113: 
n/u'siinst  conipnny  n\u\  uuikiIiI.  157; 
ji^jMlnsr  conipnny  juid  paid,  G47. 

Tjibor  cost  ilrfincd.  x. 

Ljnnl:  not  nseil  in  operntlons.  10.':  for 
rl;;bf  of  wny.  2fM :  for  other  oi»enit- 
ln«  nses.  2or».    ( See  also  (Ironnds.) 

Linv  expense:  for  orpniilxcition.  IMK): 
for  consirnctlon  period,  231.  C4S:  for 
peneral  puri>oses,  045;  for  dauiajje 
cases.  049. 

Leasetl  proyierty;  rent  roceiv?ible  In- 
come, 310.  .'ill;  maintenance  by  les- 
Bor.  310.  311;  rent  receivable  reve- 
nno.  .IStK  521. 

Leasebobls:  for  rlffht  of  way.  204;  for 
otiier  operating  nses.  205. 

Liabilities:  contlnyrcnt,  -  vl ;  actual, 
(.'^ee  Italance  sheet.) 

Loss:  by  extraordinary  cnsnnltles.  .\xl. 
xxil:  handled  throuRh  reserve.  173: 
on  operations  of  others.  325:  by  sile 
or  retirement  of  Investments.  417; 
on  vehicles  and  horses.  702:  on  tools! 
703.     (See  also  Depreciation.) 

Lnnch  rooms;  eqniiunent,  200,  221 ;  ex- 
|»ense.  02S;  receipts,  G28. 

M»'chlnery:  appnrtenant  to  bnlldlnjrs 
20G:  foundations  In  buildings,  20(;: 
in  transndssion  olHces.  207.  220;  in 
floating'  equipment,  21S,  22;J:  in 
shops.  225:  repairs  in  transmission 
otfiLes,  001;  repairs  in  buildlnps. 
005:  repairs  and  depreciation  lu 
shoi)s,  701.     (See  also  Tools.) 

Maintenance  expense;  on  property 
leased  to  others.  310.  311  :  for  sui>er- 
vlslon.  000;  for  repairs,  001 -(lOO:  for 
short-term  rentals.  G07:  for  deprwl- 
ntlon,  (JOS.  (501).  Oil:  miscellaneous. 
CIO:  covered  by  otilce  reiit,  025:  In 
clearlnj;  accounts.  701-704,  700,  70S, 
700.     (See  also  Kei»ali-s,) 

Marine  news  service;  revenues,  505; 
expenses.  030. 

Mairket  news  service;  revenues.  505; 
expenses,  030. 

Marketable  securities  assets,  109. 

Materials.     (See  Supplies.) 

Messijre  revenues;  guaranty  deposits. 
lOOn;  telegraph,  500-507;  cable, 
510-513. 

Messenger  service;  equipment.  209; 
revenue,  523;  equipment  repairs, 
001;  expense,  623;  credits  to  ex- 
r>ense.  023. 

Money  transfer  revenue:  from  trnns- 
mlssions.  504;  from  prendums.  522; 
from  ni   jsajre  condensjitlon.  525. 

Mortgage    (real   estate)    llablllt.v.  154. 

News  service ;  revenues,  505 ;  exi)euses. 
030. 

Nonoperating  Income:  rents,  310.  .311: 
dividends.  312;  interest.  313;  fund 
accretiojis.  314:  from  o[>eratlons  of 
otliers,  315;  mlsceiiuneous,  310. 


Xontranjfmisslon  rerenuw:  w»nts  P;20, 
521:  money  transfer  piemlinn.s,  .''•22; 
messenger  service.  C2:J:  time  siuvice, 
524;  misceltaneous.  52.1. 

Notes  (pa.vable):  long-term  note  lia- 
bility, l.')4:  demand  notes  to  cover 
advances,  l.'(;:  demand  and  short- 
term  notes.  l."S. 

Notes  (receivable);  long-term  note  In- 
vestments, Kki;  sl)ort-t»Min  notes  as 
b;il8  receivable.  103n:  demand  notes 
to  cover  advances.  104;  lontf-term 
notes  marketable.  llOn. 

Obsolescence  as  form  of  depreclatioD, 
XX  I. 

Olllce  equipment:  transmission  tonnl- 
nals.  207.  220:  furnishings  ami  busi- 
ness cqnl|iment.  200.  221,  224:  re- 
pairs of  terminals.  (K)l ;  repairs  of 
furnishings,  001,  044. 

Offlce  expen.ses:  for  organization.  200; 
during  constrrrtlon,  2:n,  2:j;5.  7(i.'i. 
7(Ki;  for  suiiervlsion  of  milntenance, 
COD.  700;  for  su|>ervisioii  of  opera- 
tions, 020:  for  transmission  iilllces. 
02."i.  020.  020:  for  general  «)mces,  (M.J. 
044;  for  law  otlices,  045;  for  valua- 
tion force.  051 ;  for  geneial  engineer- 
ing. 705:  for  genoral  purposes.  ';(i7. 

Oflive  structures:  land  cost.  205:  struc- 
ture i-ost,  200;  repairs  when  reniiMl. 
O^K),  020.  025,  G44;  repairs  when 
owned.  i'tOr*. 

Oi)eiating  expenses;  telegraph  and 
cable  total,  301  :  other  than  telegraph 
and  cable,  303;  for  mdnten  ince. 
C(J0-011  ;  for  conducting  operations, 
020-(U'55;  general  and  ndscel la  neons, 
(540-054;  iu  clearing  accounts.  701- 
700. 

Operating  income  accounts,  300~30,'*. 

Oi)eratlng  reserves;  debit  balances, 
127;  credit  balances,  175;  oi)erating 
exiiense  debits,  004. 

Operating  revenues;  definition,  xvl; 
luisis  of  credits,  xvl :  permiss  ble 
deblt-s.  xvii;  credits  from  customers' 
accounts,  1(50.  105:  reserve  for  doubt- 
ful accounts.  172;  telegrapl;  and 
cable  total.  300;  other  than  tele- 
grai)h  and  cable.  302;  uncollectible, 
.304;  from  telegraph  transmission, 
.'i00-.'»07:  from  cable  transniisshm. 
510-513;  from  nontransndssion 
sources,  520-525;  contract  debits, 
.''.30. 

Operations  of  others;  profits,  315; 
lo.sses,  325. 

Oiwrators:  |iay  for  service.  021;  pay 
while  training,  027;  lunches  fur- 
nished. 02S;  expenses.  029. 

Organization;  costs,  200;  amortlxa- 
tlon  of  co.sts,  414. 

Original  plant  and  equipment;  de'^iU- 
tlon.  vll :  acr^nntlng  for  cost,  vll. 

Overcliarge  debits  to  revenues,  x?U. 


79 


" 


Pntentu:  accounting  for  extensions, 
vll:  amortization  reserve.  171;  In- 
vestment. 2(12;  anion Ization.  052. 

Paving;  assessments,  232ii :  after  con- 
duit repairs.  (J03;  by  franchise  re- 
quirement, ()50. 

Pay  and  expenses;  inclusion  in  cost  of 
labor,  x;  Inclusion  in  cost  of  re- 
jialrs.  XX ;  audited  but  mipaid.  15'.>: 
Of  purchasing  agents.  204.  205;  as- 
signable to  cojistrucllon.  2;:0,  231, 
2r{3;  maintenance  supervision  foice, 
(500:  engineering  force.  COO,  705: 
testing  and  regulating  force.  COO; 
transmission  supervision  force.  020; 
operators  and  nmnagers.  021,  027. 
029:  transmission  otti(e  clerk.s.  022: 
messenger  force,  023;  operators' 
school  force.  027:  advertising  and 
g«»llcltlng  force.  033:  general  officers, 
WO.  042:  general  office  clerks,  041. 
CW2:  geneial  office  attendants.  014: 
law  force.  Ch15.  G4S;  cbilms  force,  047 ; 
relief  depnrtn»ent  force.  049;  \ abla- 
tion forte,  051 ;  shoi>  force.  701 ; 
St;  ble  and  garage  force.  702;  pur- 
cl'asing  and  stores  force.  704;  apiwir- 
tlonment  between  operation  and  con- 
struction. X.  701-709:  plant  supervi- 
sion force.  700:  Iiouse  service  force. 
707:  floating  equipment  force.  70S: 
railway  etpilpment  force,  701).  (See 
also  Commissions.) 

Pensions:  fund  assets,  120;  fund  lia- 
bility, 174;  payments  and  exi)euse, 
C49. 

Personal  injury:  credits  to  reserve. 
173;  adjustment  of  charges.  173; 
charges  to  oi)erating  exi>enses.  C47; 
charges  to  plant  and  efpiipment.  (547. 

Plant  and  equipment;  definitions,  vii ; 
cost  diarges  on  money  basis,  vlll: 
factors  in  cost  charges,  x:  cost 
charges  for  purchased  property,  xi ; 
a,s.set  linlances,  100.  101  Ip.  21 1: 
investment.  100.  101  ip.  35i :  charges 
for  property  put  into  service,  102: 
Income  and  surplus  invested,  170; 
Investment  In  detail.  200-2.33:  ac- 
counting for  withdrawals  and  retire- 
ments, xll.  229;  appropriations  for 
investment.  332.  415;  depreciation. 
OOS;  preliminary  charges  to  clearing 
accounts,  701-7OD.  (See  also  l*roi>- 
erty. ) 

Plant  sufjer vision  expense  In  clearing 
accoinit.  700. 

Pneumatic  tubes:  for  telegraph.  207. 
217:  for  calde  lines.  220;  repairs  of 
Interior  tubes,  COl;  repair  of  outside 
tuhes.  00.3. 

Pole  line:  for  telegraph.  211 :  for  cable 
line,  222:  maintenance  while  letised. 
811:  reiiairs  for  telegraph,  C02;  re- 
pairs for  cable  line,  004. 


Power  equipment;  for  buildings.  200; 
for  telegraph  lines  207;  for  fiositing 
e<iulpment.  21S.  223;  for  cable  lines, 
220;  for  sliop  operations.  225:  re- 
pairs for  operating  equipment,  001; 
rei»alrs  for  buildings.  005. 

Power  expense:  for  line  operation.  024 : 
for  .shops,  701;  for  buildings  and 
offices,  707. 

Premium  (miscellaneous) ;  on  securi- 
ties of  other  companies.  313.  .314. 
(See  also  Insurance,  Money  trans- 
fer. ) 

Premium  (on  capital  stock)  ;  defini- 
tion, Iv;  accounting.  Iv:  record  entry 
on  stock  account.  l.'»0;  assessments 
on  stockholders.  l.'iOn:  liability  bal- 
ance, 152;  at  reicquirement.  lil.  401; 
ad.justmeut  debits  at  reacquiremeut, 
417. 

Premium  (on  funded  debt) ;  definition, 
v;  accounting,  v;  record  entry  in 
fundel  debt  account,  l.">4:  unextin- 
guished, V,  109;  relense  through  in- 
come. V.  327;  at  reacquirement.  lil. 
401 ;  adjustment  debits  at  reacquire- 
ment, 417. 

Prepayments;  rents,  121;  taxes.  122; 
insurance  premiums,  123;  miscel- 
laneous, 124. 

Press  rate  messages;  telegraph  reve- 
nue, 503;  cable  revenue.  512. 

Printing.  (See  Stationery  and  print- 
ing.) 

Profit  and  loss  account:  debits  for 
property  retiretl  or  sold,  xll:  defini- 
tion. XV ;  adjustments  of  s;iivage 
values.  115:  debit  balance.  12S; 
credit  balance.  179;  debits  for  un 
collectible  reveiue,  304 n ;  credit  ac- 
counts. 400,  401;  debit  accounts. 
410-417. 

Profits;  from  operations  of  others, 
315:  from  sale  of  property,  xii.  401  ; 
from  services  for  others)  702,  708, 
7Ci9. 

Proujotlon  expense.  200. 

Property;  retired  or  sold,  xll.  aban- 
doned or  destro.ved,  xxii:  in  course 
of  construction,  102:  not  used  in  op- 
erations. 105;  purchased,  xi,  205u. 
(See  also  Plant  and  equipment.) 

Provident  funds,  asset  balances.  120; 
linlillty.  174. 

Railway  equipment;  expense  for  con- 
struction In  progress.  102:  invest- 
ment for  telegraph.  219;  expense  in 
clearing  account.  709. 

Reacquired  securities;  accounting,  ill; 
inclusion  in  liability,  150.  l.">4;  ad- 
justment of  book  value,  401.  417. 

Receiver's  ceitlflcates  ll'bilit.v,  l.Vi. 

Reconstruction  of  plant;  as  distinct 
from  repairs,  xlx;  unanticipated. 
xxiL 


80 


Redemrttton     funds.      (See     Resen*e 

flllKlK.  ) 

Refunds:  of  revenue,  xvll:  of  custom- 
ers' depopits.  100;  for  failure  uf 
service.  03-1  n. 

nojjuIntluK  force  pny  nnd  expense.  HOC. 

Relief:  fund  iissers,  120:  fund  liability. 
174  :  expenses  nnd  contributions,  040. 

Relocsition  of  plant,  xlx. 

Rent  (p.'iyiible)  ;  prepaid.  121;  due.  but 
unpsiid.  lo:^:  accrued,  but  not  due, 
lOS:  of  general  ottices  during  con- 
struction. 2iW:  for  leased  proi)erty. 
320.  321 :  for  maintenance  ottices. 
CoO:  for  short-term  rentals,  GOT:  ft»r 
supervision  otti  es,  020:  for  transmis- 
sion oHices,  025;  for  peneral  ottices. 
644 :  for  shop  buildini^s.  701 ;  for 
stables  nnd  pirapes.  702;  for  vehi- 
cles and  ijorses.  702;  for  storerooms 
nnd  storeliouses.  704;  for  engineers' 
ottices,  705;  for  plaint  suiiervis  on 
ottices.  70<»:  for  buildings  and  ottices 
not  allocated.  707  ;  for  floating  equl])- 
nient,  703;  for  railway  equipment, 
709. 

Rent  ( receivable)  ;  accrued,  but  not 
due.  117:  from  plant  leased  to 
olhers.  310,  311 ;  rent  expenses,  311 ; 
from  plant  maintained  by  company, 
ri2«»,  521 :  from  messengers'  uul- 
for;ns.  G23. 

Repairs;  ordinary  repn Irs nud  extrnor- 
dinnry  reii.iirs  dettned,  xlx;  cost 
of  repairs  dettned,  xx :  depreciation 
chnrges  for  repairs,  xlx,  170,  Gil; 
ortice  repairs  during  construction. 
2:J3:  of  engineering  outtti.  GOO;  of 
rente<l  maintenance  ottices,  GOO;  of 
transndssion  ottice  equipment,  001 ; 
of  ujessenger  service  e<p:lpment.  OOl ; 
of  telegraph  aerial  plant.  G02 ;  of  tele- 
graph underground  and  submarine 
l»lant  and  right  of  wa.v.  G03;  of 
wean  cable  and  cable  land-line  plant. 
C04:  of  buildings  and  grounds,  GO.'j; 
of  miscellaneous  nature.  010;  reserve 
debits  creiUted  to  operating  ex])ense. 
Oil ;  of  rented  ottices  for  conducting 
oi)eratlons,  G20,  025;  of  messengers' 
uniforms.  023;  of  general  ottice  fit- 
tings, G44;  of  rented  general  ofttt-es. 
C44:  of  shop  equipment.  701;  of 
vehicles.  702:  of  tools.  703:  of  store 
equipment.  704;  of  rented  offices  and 
buildings  not  allocpted,  707;  of  float- 
ing equipment,  70S;  of  railway 
equipment,  709.  (See  also  Maiu- 
teuiince.) 

Re[)lacements :  deflnition,  vii;  account- 
ing for  costs,  vii.  xlx. 

Reserve  funds;  sinking  fund  nssets, 
118;  Insurance  and  other  fund  as- 
sets, 119;  accretions  through  Income, 
814.  330;  premium  and  discount  en- 


tries. 314:  nppmprlntlons  of  Income; 
3.'iO:  appn-prtiitluus  of  surplus.  411. 
Reserves:  entries  to  ad.1ust  security 
values,  lii:  for  repairs  of  cable  lines, 
127,  17.5,  G04;  for  property  retlrwl, 
xil.  170;  for  accrued  depreciation. 
170;  for  amortlzntlou  of  intangible 
cnpitnl.  171 ;  for  doubtful  ace<»unts. 
172,  304;  for  Insurnce  and  caisual- 
ties,  173:  for  sinking  funds.  177; 
for  miscellaneous  purix'^es.  17S. 

Rest  rooms:  equipment,  200.  221;  ex- 
Iiense.  G2S. 

Retirement  of  propert.v;  accounting, 
xil,  xxil,  170;  debits  for  losses.  417. 

Revenue.      (See  0|)erating   revenues, > 
Right  of  way;  investment.  204;  clear- 
ing, 211,  G02;  repairs,  G03. 

Salaries.     (See  Pay  nnd  expenses.) 

Snlvnge;  cost  of  recovery,  xlx;  iucln- 
sion  iu  nniterials  and  supplies,  115; 
credit  to  laud  account.  20.')U. 

Savings  funds;  asset  balances,  120; 
liability.  174. 

Schools;  equlpmenr.  209.  221;  expense, 
G27. 

Securities;  optional  record  of  Invest- 
ment value,  ii;  par  value  entries  for 
Ihiblllty,  iil;  accounting  for  value 
when  reacquired,  lii:  held  as  lnvi»8t- 
ment,  103;  in  .special  deiwsits.  107; 
held  as  marketable.  109:  In  reserve 
funds,  lis.  110;  In  provident  lunds, 
120;  liability  for  conver.^^iou,  l.'il : 
assignable  to  organiz  tlon  expense. 
2(X):  adjustment  of  book  value  when 
reacqulretl.  11,  401.  417. 

Service;  billed  to  customers  In  nd- 
vnnce,  1G5;  under  franchise  require- 
ment, (>50;  performed  for  others 
with  equipment,  702.  70S.  709. 

Shop  equipment ;  for  general  shops, 
225;  for  stables  and  gar.iges,  227; 
repnlrs  nud  depreclatlou.  701. 

Shop  expense  In  clearing  account.  701. 

Shop  structures:  land,  205;  buiidlugs, 
2UG;  leialrs.  005. 

Sinking  funds;  asset  balances,  118:  re- 
serves, 177.  178;  accretions,  177.  314. 
330;  premium  nnd  discount  entries, 
314;  npproprlatlons  from  Income, 
330;  appropriations  from  surplus, 
411. 

Smithing  equipment,  225.  (See  also 
Stables,) 

Soliciting  expense;  nt  organization. 
200;  for  opemtlon,  G33. 

Stables:  laud.  205;  buildings.  206; 
equipment.  227;  building  repairs, 
605;  ex))ense  in  clearing  account, 
702;  service  for  others.  702. 

Stationery  and  printing:  In  debt  ex« 
r>ense,  v;  unapplied.  115;  for  law 
force  during  construction.  231 :  for 
muintenauce  offices,  600;  for  super- 


81 


vision  of  operations.  620;  for  trans- 
mission offices,  626;  for  general 
offices,  643 ;  for  law  work,  645,  648 ; 
for  valuation  work,  651;  expense  in 
clearing  account,  704. 

Steamboats.  (See  Floating  equip- 
ment.) 

Stock.    (See  Capital  stock,  Securities.) 

ties.) 
Stock   news;    revenue,    505;   expense. 

Store  equipment;  Investment,  226;  re- 
pairs, 704. 
Store  rooms.     (See  Storehouses.) 
Store  supplies.    (See  Supplies.) 
Storehouses;  land,  205;  buildings,  206; 
equipment,    226;     building    repairs, 
605;    expense   in   clearing   account, 

7(V4. 
Street    Improvements;    chargeable    to 
plant   and    equipment,    232n.      (See 
also  Assessments,  Paving.) 
Structural  value  defined,  xl. 
Submarine     plant;     telegraph,     216; 
cable  line,  222;  repairs  for  telegraph, 
G03;  repairs  for  cable  line.  604. 
Subscribers'  equipment ;  for  messenger 
service,  208;  for  telegraph,  210;  re- 
pairs, 601. 
Superintendence;  during  construction, 
230;    expense    in    clearing    account, 
706.     (See  also  Engineering.) 
V  Supervision    expense;     for    construc- 

1  tlon  in  progress.  102;  for  building 

construction,   200;   for  maintenance, 
600;   for  operations,  020;   in  clear- 
ing account,  706. 
Supplies;  cost  defined,  x;  inclusion  In 
cost  of  repairs,  xx;1mapplied.  115; 
shortages  nnd  overages,  115,  704;  of 
small  value,  228n;  for  engineers  on 
construction,    2?J0;    for    sui)ervisiou 
ottices,  600.  G20:   for  power  plants, 
624;    for    transmission    offices,   <J26, 
C29;  for  operators'  schools,  G27:  ^r 
'    general  offices,  643,  644;   furnishM 
under    franchise   requirement,    650; 
for  valuation  work,  G51;  for  shops. 
701;   for  stables  and  garages.  702; 
depreciation,  704 ;  for  buildings  and 
offices  not  allocated.  707;  for  float- 
ing   equipment.    708;    for    railway 
equipment.  700.     (See  also  Station- 
ery and  printing,  Supply  exi)ense,) 
Supply  exiKjnse;  inclusion  in  cost  of 
supplies,    x;     for    construction    In 
progress,  102;  entries  for  shortnges 
nnd  overages,  115.  704;  for  construc- 
tion, 233;   in  clearing  account.  704. 
and  equipment,  176;  temiwrary  ap- 
propriations. 176n ;  reserved  in  sink- 
ing funds.  177,  178;  held  in  miscel- 
laneous reserves,  178;  intended  for 
investment  in  plant  and  equipment, 
178;  appropriated  to  reserve  funds. 

65922'— 13 6 


411;  appropriated  for  dividends, 
412;  appropriated  foi  construction, 
equipment,  and  betterments,  415; 
miscellaneous  appropriations,  416. 
Suspense  accounts ;  balances,  127,  175 ; 
for    casualties    and    reconstruction, 

xxii.  609.  ,       V,  1^ 

System   corporations;    securities   held 
'as  investment,  103;  definition,  103n; 
accounts   receivable  from,   112;   ac- 
counts payable  to,  161. 
Taxes;  embraced  in  debt  expense,  v; 
paid   for   specific    service,   xiv;    ac- 
counting, xiv ;  paid  by  party  not  ob- 
ligated,   xiv;    prepayment    balance, 
xiv,  122:  accrued  liability,  xiv,  167; 
assumed   with   land   acquired,   205; 
levied     during     construction,     232; 
levied  for  improvements,  xiv.  232n; 
assignable  to  operations,  305;   non- 
operating,  324. 
Telegraph  message  revenues;  of  tele- 
graph companies,  500-507 ;  of  cable 
companies,  510-513,  : 

Telephone  companies;  revenue  debits 
for  transmission  service,  507;  pay- 
ments for  business  service.  507n; 
rent  from  wires  leased  to,  520;  em- 
yiloyees'  services  in  joint  offices, 
631 ;  commissions  for  collection  serv- 
ice, xviii.  631. 
Test     stations.       (See     Transmission 

offices. ) 
Testing:  terminal  apparatus,  207,  220; 
portable  apparatus,  228 ;  pay  and  ex- 
penses of  force,  606. 
Tickers;  investment,  210. 
Time  service;   bills  in  advance,  165; 

revenue  credits,  165,  524. 
Toll  revenues  (cable)  ;  at  commercial 
rates,  510;  at  government  rates,  510, 
511;  from  press  messages,  512;  from 
other  messages,  513;   refunds,-  xvli, 
634  n. 
Toll  revenues  (telegraph)  ;  at  commer- 
cial rates,  500,  501;  at  government 
rates,  500,  502 ;  from  press  messages, 
503;  from  money -transfer  roessjiges, 
504;  from  other  messages,  500;   re- 
funds, xvii,  634n. 
Tool  expense ;  for  construction  In  prog- 
ress, 102;  in  clearing  account,  703. 
Tools;  unapplied,  115;  used  in  shops, 
225:   used  in  stores,  226;  valuable, 
228;   portable  and  of  small  value, 
vii,  22Sn,  703;  repairs  and  deprecia- 
•    tlon  in  shops,  701 :  other  repairs,  de- 
preciation, and  losses,  703. 
Traffic  damages  expense,  634. 
Transfer  agents'  expenses,  653, 
Transmission  offices:  land,  205;  build- 
ings, 200;  equipment  for  telegraph, 
207-209:   equipment   for   cable  line, 
220,    221:    equipment    repairs,    601; 
j      office  repairs,  605;  expense  of  opera- 
I       tion,  021-031. 


82 


Transmissioo  revenues ;  telegraph, 
500-507;  cable,  510-513. 

Transportation  charges;  Inclusion  In 
cost  of  supplies,  x.  xx;  inclusion  in 
asset  value  of  material,  115;  inclu- 
gion  in  supply  erpense,  704. 

Trust  funds  without  bereflcial  inter- 
est. 120n,  174n. 

Tubes.     (See  Pneumatic  tubes.) 

Underground  plant;  telegraph,  214, 
215 ;  cable  line,  212 ;  repairs  for  tele- 
graph, 603;  repairs  for  cable  line, 
604. 

Uniforms  of  messengers;  cost,  208; 
repairs,  623;  rent  receipts,  623. 

Valuation  expense,  651. 

Vehicles :  Investment.  227 ;  repairs  and 
depreciation,  702. 

Vessels.     (See  Floating  equipment.) 

Vouchers  auditHl  but  unpaid,  159. 


Wages;  audited  but  unpaid,  150;  paid. 
( See  Pay  and  expenses. ) 

Wagons.     (See  Vehicles.) 

Wires  (of  cable  lines) ;  in  offices,  220; 
aerial,  222;  n^aintenanet  while 
leased,  311;  repairs  for  offices.  601; 
repairs  for  land  line,  604;  interior 
IxQtching.  606. 

Wires  (of  telegraph  lines)  ;  In  ofHces. 
207;  at  messenger  circuit  terminals. 
208;  on  subscribers*  premises,  208, 
210;  aerial,  213;  maintenance  while 
leased,  311 ;  repairs  for  offices,  mes- 
senger circuit  terminals,  and  sub- 
scribers' terminals,  601 ;  repairs  for 
aerial  line,  002;  interior  patching, 
006. 

Wireless  message  revenues,  500.  502- 
504. 

Workiuf  funds  asset  balances,  ia& 


A 


H 


I 
I 


K 


/ 


f 


REGULATIONS 


TO  GOVERN  THE 


DESTRUCTION  OF  RECORDS 

OF 

TELEPHONE,  TELEGRAPH 
AND  CABLE  COMPANIES 

(INCLUDING  WIRELESS  COMPANIES) 
PRESCRIBED  BY  THE 

INTERSTATE  COMMERCE  COMMISSION 

IN  ACCORDANCE  WITH  SECTION  20  OF  THE 
ACT  TO  REGULATE  COMMERCE 


ISSUE  OF  1920 

Effective  on  January  1,  1920 

(Superseding  and  canceling  regulations  effective  February  1,  1914) 


i< 


1  ■. 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1920 


80HOOL  OF  BUOINCSS 
COLUMBIA  UNIVERSITY 


THE  liNTERSTATE  COMMERCE  COMMISSIOxN. 


Clyde  B.  Aitchisox,  Chairman. 
Edgar  E.  Clark.                            Winthrop  M.  Daniels. 
Charles  C.  McChord.                    Robert  W.  Woolley. 
Balthasar  H.  Meyer.                   Joseph  B.  Eastman. 
Henry  C.  Hall.  .* 

George     .  McGinty,  Secretary, 

*  Vacancy. 
2 


> 


« 


CONTENTS. 

Pafe. 

Order  of  the  Commission ^ 

Special  notice '^ 

Destruction  authorized ^ 

Officer  having  supervision  of  destruction ^ 

Committ<?c  for  destruction  of  certain  records 10 

Written  authority  of  officer  having  supervision  of  destruction 10 

Certificates  of  destruction 1^ 

Joint  agencies H 

Nonoperating  companies 1'-^ 

Method  of  dt«truction ^2 

Accidental  destruction  of  accounts,  re<ords,  and  memoranda 12 

Duplicate  accounts,  records,  and  memoranda 12 

List  of  accounts,  records,  and  memoranda,  and  periods  of  retention 13 

General  and  linancial ^^ 

Treasury * 1^* 

Revenues 1^ 

Expenditures ^^ 

PurchascH  and  stores 20 

Ojjerations 21. 

Stitistics 26 

M  Iscellaneous -^ 

Appendix 31 

Index 35 

3 


i 


% 


« 


At  a  General  Session  of  the  INTERSTATE  COMMERCE  COM- 
MISSION, held  at  its  office  in  Washington,  D.  C,  on  the  3rd  day  of 
November,  1919. 

The  matter  of  the  determination  of  the  operating,  accounting,  and 
financial  papers,  records,  books,  blanks,  tickets,  stubs,  and  docu- 
ments of  telephone,  telegraph,  and  cable  companies  (including  wire- 
less companies)  which  may,  after  a  reasonable  time,  be  destroyed 
being  mider  consideration,  the  foUow^ing  order  was  entered : 

It  is  ordered,  That  the  Regulations  to  Govern  the  Destruction  of 
Records  of  Telephone,  Telegraph,  and  Cable  Companies  (including 
wireless  companies).  Issue  of  1920,  a  copy  of  which  is  now  before 
this  Commission,  be,  nnd  they  hereby  are,  approved;  that  a  copy 
thereof  duly  authenticated  by  the  Secretary  of  the  Commission  bo 
filed  in  its  archives,  and  a  second  copy  thereof,  in  like  manner 
authenticated,  bo  filed  in  the  office  of  the  Bureau  of  Carriers'  Ac- 
counts; and  that  each  of  said  copies  so  authenticated  and  filed  shall 
be  deemwl  an  original  record  thereof. 

It  is  further  ordered,  That  the  said  Regulations  be,  and  they  hereby 
are,  prescribed  for  the  use  of  telephone,  telegraph,  and  cable  com- 
panies (including  wireless  companies)  subject  to  the  provisions  of  the 
Act  to  Regulate  Commerce  as  amended,  in  the  destruction  of  their 
accounts,  records,  and  memoranda;  and  that  a  copy  of  the  said 
Regulations  be  sent  to  each  and  every  such  carrier  and  to  each  and 
every  receiver  or  operating  trustee  of  any  such  carrier. 

It  is  furtlver  ordered,  That  each  and  every  such  carrier,  and  each 
and  every  receiver  or  operating  trustee  of  any  such  carrier,  be,  and 
hereby  is,  permitted  to  destroy  the  accounts,  records,  and  memoranda 
named  or  described  in  the  said  Regulations,  after  preserving  the 
same  for  the  periods  of  time  respectively  specified  and  upon  com- 
plying with  the  requirements  of  the  Regidations. 

It  is  further  ordered,  That  all  accounts,  records,  and  memoranda  of 
such  carriers,  other  than  those  the  destruction  of  which  is  permitted 
in  the  said  Regulations,  shall  remain  imder  the  prohibition  of  destruc- 
tion contained  in  section  20  of  the  Act  to  Regulate  Commerce,  as 
amended:  Provided,  however.  That  in  case  any  such  carrier  desires 
to  destroy  any  accounts,  records,  or  memoranda  other  than  thoso- 
hereinafter  named  it  may  petition  the  Commission  to  that  effect, 
exhibiting  a  full  and  detailed  description  of  the  accounts,  records, 
or  memoranda  in  question,  clearly  explaining  their  character,  their 
use,  and  their  purpose;  it  being  understood  that  any  order  entered 
by  the  Commission  on  any  such  petition  shall,  unless  otherwise  pro- 


6  DESTRUCTION   OF   RECORDS. 

vided,  bo  limited  in  its  force  and  effect  to  the  particular  carrier 
presenting  such  petition. 

It  is  furiker  ordered,  That  the  said  Regulations  to  Govern  the 
Destruction  of  Records  of  Telephone,  Telegraph,  and  Cable  Com- 
panies (including  wireless  companies),  Issue  of  1920,  shall  become 
effective  on  January  1,  1920,  and  that  this  order  shall  supei-sede  and 
cancel  the  order  of  January  12, 1914,  in  the  matter  of  the  destruction 
of  records  of  telephone,  telegraph,  and  cable  companies  (including 
wireless  companies). 

By  the  Commission. 

[seal.]  George  B.  McGinty, 

Secretary, 


/ 


\ 


< 


SPECIAL  NOTICE. 


The  following  extract  from  section  20  of  the  Act  to  Regulate  Com- 
merce is  here  quoted  for  convenient  reference  thereto  by  carriers: 

Any  person  who  shall  willfully  make  any  false  entry  in  the  accounts  of  any  book  of 
accounts  or  in  any  record  or  memoranda  kept  by  a  carrier,  or  who  shall  willfully 
destroy,  mutilate,  alter,  or  by  any  other  means  or  device  falsify  the  record  of  any  such 
account,  record,  or  memoranda,  or  who  shall  willfully  neglect  or  fail  to  make  full, 
true,  and  correct  entries  in  such  accounts,  records,  or  memoranda  of  all  facts  and 
transactions  appertaining  to  the  carrier's  business,  or  shall  keep  any  other  accounts, 
records,  or  memonmda  than  those  prescribed  or  approved  by  the  Commission,  shall 
be  deemed  guilty  of  a  misdemeanor,  and  shall  be  subject,  upon  conviction  in  any 
court  of  the  United  States  of  competent  jurisdiction,  to  a  fine  of  not  less  than  one 
thousand  dollars  nor  more  than  five  thousand  dollars  or  imprisonment  for  a  term  not 
less  than  one  year  nor  more  than  three  years,  or  both  such  fine  and  imprisonment: 
Provided,  That  the  Commission  may  in  its  discretion  issue  orders  specifying  such 
operating,  accounting,  or  financial  papers,  records,  books,  blanks,  tickets,  stubs,  or 
documents  of  carriers  which  may,  after  a  reasonable  time,  be  destroyed,  and  pre- 
scribing the  length  of  time  such  books,  papers,  or  documents  shall  be  preserved. 

The  regulations  set  forth  in  this  order  pertain  only  to  the  accounts, 
records,  and  memoranda  named  or  described  herein.  .\11  accounts, 
records,  and  memoranda  not  indicated  in  the  regulations  remain 
under  the  prohibition  of  destruction  contained  in  section  20  of  the 
act. 

The  rules  contained  herein,  in  brief,  require: 

(a)  The  appointment  of  an  officer  to  have  general  supervision  of 
destruction  and  the  filmg  with  the  Commission  of  a  copy  of  the 
resolution  or  order  making  such  appointment.  (Pars.  2  to  5,  inclu- 
sive.) 

(6)  A  written  authority  by  the  officer  having  general  supervision 
of  destruction  to  the  person  who  is  to  perform  the  actual  physical 
destruction.     (Pars.  7  to  9,  inclusive.) 

(c)  A  certificate  of  destruction  to  be  made  by  the  person  perform- 
ing the  actual  physical  destruction.     (Pars.  10  to  14,  inclusive.) 

id)  A  statement  listing  records  accidentally  destroyed  and  the 
fihng  with  the  Commission  of  a  copy  of  such  statement.     (Par.  18.) 

The  following  exceptions  to  the  above  requirements  are  provided 
for: 

(a)  Retired  securities  may  be  destroyed  by  a  committee  designated 
by  the  board  of  directors  after  a  copy  of  the  resolution  naming 
such  committee  is  filed  witli  the  Commission.     (Par.  6.) 


8 


DESTBUCTION  OF  RECORDS. 


(h)  No  wi'itton  authority  or  certificate  of  destruction  is  required 
for  the  destruction  of  the  ''duplicate  copies"  provided  for  in  item 
127.     (Par.  19.) 

(c)  No  certificate  of  destruction  is  required  for  records  carrying 
an  "optional"  period  of  retention  other  than  retired  securities  pro- 
vided for  in  item  16.     (Par.  14.) 

It  is  not  intended  that  these  regulations  shall  be  interpreted  as 
requiring  that  the  records  herein  named  shall  be  installed,  when  such 
records  are  not  already  kept  by  a  carrier. 

Carriers  which,  prior  to  January  1,  1920,  shall  have  filed  resolu- 
tions designating  persons  to  have  authority  over  the  destruction  of 
records,  in  compliance  with  previous  orders  of  the  Interstate  Com- 
merce Commission  in  the  matter  of  the  destruction  of  records  of 
telephone,  telegraph,  and  cable  companies,  are  not  required  to  file 
additional  resolutions,  if  those  already  filed  comply  with  the  regula- 
tions herein  issued. 


i 


< 


REGULATIONS  TO  GOVERN  THE  DESTRUCTION  OF 
RECORDS  OF  TELEPHONE,  TELEGRAPH,  AND  CABLE 
COMPANIES  (INCLUDING  WIRELESS  COMPANIES). 


Destruction  authorized. 

1.  Carriers  may  destroy  the  accounts,  records,  and  memoranda 
named  in  paragraph  20  (other  than  those  marked  ''permanently") 
at  their  option  after  having  preserved  them  for  the  specified  periods 
of  time  and  upon  complying  with  the  requirements  of  these  regu- 
lations. 

Oftcer  having  supervision  of  destruction. 

2.  Su|)ervision  of  the  destruction  of  accounts,  records,  and  memo- 
randa shall  be  assigned  to  an  officer  appointed  by  the  board  of  di- 
rectors or,  if  the  carrier's  organization  shall  requu-e  it,  to  two  officers 
80  appointed.  Such  officer  or  officers  may  be  given  (a)  general  super- 
vision of  the  destruction  of  all  accounts,  records,  and  memoranda  the 
destruction  of  which  is  permitted  by  these  regulations,  or  (b)  author- 
ity over  the  destruction  of  such  of  these  accounts,  records,  and 
memoranda  as  may  be  specified  by  the  board  of  directors.  A  copy 
of  the  resolution  of  appointment  shall  be  filed  with  the  Commission 
before  the  destruction  of  any  of  the  accounts,  records,  or  memoranda 
involved.  Pending  action  by  the  board  of  directors,  an  appointment 
by  an  executive  committee,  or  by  a  similarly  authorized  committee 
of  the  board  of  directors,  shall  have  the  same  effect  as  if  made  by  the 
board  of  directors. 

3.  If  the  property  of  a  carrier  is  in  the  hands  of  a  receiver  or  oper- 
ating trustee,  the  officer  or  officers  to  have  supervision  of  the  destruc- 
tion of  accounts,  records,  and  memoranda  shall  be  designated  by  the 
receiver  or  trustee.  A  copy  of  the  order  of  the  receiver  or  trustee 
designating  such  officer  or  officers  shall  be  filed  with  the  Commission 
before  the  destruction  of  any  of  the  accounts,  records,  or  memoranda 
involved. 

4.  If  the  property  is  operated  by  an  individual,  firm,  copartnership, 
or  association,  the  head  of  the  concern  shall  designate  the  person  to 
have  charge  of  the  destruction  of  records  and,  if  it  is  desired,  may  so 
designate  himself.  A  copy  of  the  order  designating  such  person  shall 
be  filed  with  the  Commission  before  the  destruction  of  any  of  the 
accounts,  records,  or  memoranda  involved. 

5.  In  designating  an  officer  to  Have  general  supervision  of  the  de- 
struction of  accounts,  records,  and  memoranda  it  would  be  preferable 

]  5269°— 19 2  J» 


10 


DESTRUCTION  OF  RECORDS. 


DESTRUCTION  OF  RECORDS. 


11 


to  designate  by  title  only,  rather  than  by  name  and  title,  and  th\i8 
obviate  the  necessity  of  filing  a  new  resolution  each  time  a  successor 
in  the  office  is  appointed. 

Committee  for  destruction  of  certain  records. 

6.  At  the  option  of  the  carrier  the  board  of  directors  may  from 
time  to  time  name  a  committ-ee  to  destroy  canceled  stock  certificates, 
bonds,  or  other  records  covered  by  item  16  of  paragraph  20  in  lieu  of 
delegating  the  authority  for  the  destruction  to  an  officer,  as  provided 
in  paragraph  2.  A  copy  of  the  resolution  of  the  board  of  directors 
naming  such  committee  shall  be  filed  with  the  Commission  before  the 
destruction  of  any  of  the  records  involved. 

Written  authority  of  officer  having  supervision  of  destruction. 

7.  When  any  accounts,  records,  or  memoranda  are  to  bo  destroyed, 
an  officer  having  supervision  of  the  destruction  of  accounts,  records, 
and  memoranda  (as  designated  in  compliance  with  paragraphs  2,  3, 
or  4)  shall  issue  a  written  authority  designating  by  name  and 
title  or  by  title  or  occupation  the  i>orson  or  persons  by  whom  the 
accounts,  records,  or  memoranda  are  to  bo  destroyed  (except  as 
provided  for  in  paragraph  19). 

8.  The  written  authority  (a)  may  be  confined  to  certain  accounts, 
records,  and  memoranda  which  have  been  retained  for  the  ])eriods  of 
time  specified  in  these  regulations  and  which  the  carrier  then  desires 
to  destroy,  in  which  case  it  shall  indicate — 

First.  The  accounts,  records,  or  memoranda  to  ])(>  destroyed,  ex- 
pressed either  in  form  numbers  or  by  descriptive  titles;  and, 

Second.  The  period  or  periods  covere<l  by  the  accounts,  records,  or 
memoranda  the  destruction  of  which  is  authorized — 
or  (b)  maybe  of  continuing  effect,  applying  to  any  or  all  the  accounts, 
records,  and  memoranda  named  herein  as  the  perioiis  of  retention  of 
such  accounts,  records,  or  memoranda  attain  the  limits  specified  herein. 

9.  Such  written  authority,  or  a  certified  copy  thereof,  shall  \ye  filed 
in  the  office  of  the  issuing  officer  as  a  permanent  part  of  the  carrier's 
records.  It  is  not  required  at  present  that  copies  of  the  written 
authorities  be  filed  with  the  CommLssion. 

Certificates  of  destruction. 

10.  The  person  or  persons  upon  whom  devolves  the  duty  of  th« 
direct  supervision  of  the  destruction  of  the  accounts,  records,  or 
memoranda  under  the  authority  referred  to  in  paragraph  8(a)  shall 
make  certificate  (except  as  provided  for  in  paragraphs  14  and  19) 
settinsr  forth  that  the  accounts,  records,  or  memoranda  list^nl  in  the 
said  authority  have  been  destroyed  and  that  no  other  accounts, 
records,  or  memoranda  than  those  so  listed  have  been  destroyed 
therewith. 


\ 


I 


i 


11.  If  an  authority  as  referred  to  in  paragraph  8  (b)  is  given,  a 
certificate  of  destruction  shall  be  made  by  the  person  or  persons  upon 
whom  devolves  the  duty  of  direct  supervision  of  destruction  (except 
as  provided  for  in  paragrapks  14  and  19)  listing  either  by  form  num- 
bers or  descriptive  titles  the  accounts,  records,  and  memoranda  de- 
stroyed, naming  the  period  or  periods  covered  by  the  accounts,  rec- 
ords, and  memoranda  and  stating  that  no  other  accounts,  records,  or 
memoranda  than  those  so  listed  have  been  destroyed  therewith. 
Either  (a)  separate  certificates  shall  be  made  each  time  any  accounts, 
records,  or  memoranda  are  destroyed,  or  (b)  cumulative  certificates 
shall  be  made  with  entries  each  time  any  accounts,  records,  or 
memoranda  are  destroyed. 

12.  When  any  records  covered  by  item  16  of  paragraph  20  are 
destroyed,  a  certificate  of  destruction  giving  full  descriptive  reference 
to  the  documents  destroyed  shall  be  made  by  the  person  or  persons 
authorized  to  perform  such  destruction  and  shall  be  retained  perma- 
nently by  the  carrier.  When  documents  represent  debt  secured  by 
mortgage,  the  certificates  of  destruction  shall  also  be  authenticated 
by  representatives  of  the  trustees  acting  in  conjunction  with  the 
person  or  persons  destroying  the  documents  or  shall  have  the  trustees' 
acceptance  thereon. 

13.  Certificates  of  destruction  shall  be  forvsarded  promptly  to  the 
officer  having  supervision  of  the  destruction  of  accounts,  records,  and 
memoranda,  who  issued  the  written  authority,  and  shall  be  retained 
in  his  office  as  a  permanent  part  of  the  carrier's  records.  In  case 
cumulative  certificates  are  made  they  shall  be  forwarded  to  such 
officer  periodically,  but  at  least  once  every  six  months.  It  is  not 
recpiired  at  present  that  copies  of  the  certificates  of  destruction  be 
filed  with  the  Commission. 

14.  Certificates  of  destruction  need  not  be  made  for  accounts,  rec- 
ords, and  memoranda,  with  the  exception  of  retired  securities  referred 
to  in  paragraph  12,  the  destruction  of  which,  in  the  list  in  paragraph 
20  hereof,  Ls  made  optional  with  the  carrier,  but  a  written  authority, 
either  for  specific  records  or  of  continuing  effect  (except  as  provided 
for  in  paragraph  19),  shall  be  issued  by  the  officer  having  supervision 
of  the  destruction  of  such  accounts,  records,  and  memoranda. 

Joint  agencies. 

15.  These  regulations  apply  also  to  the  destruction  of  accounts, 
records,  and  memoranda  of  traffic  associations  and  other  joint  bureaus 
and  agencies  maintained  by  or  on  behalf  of  telephone,  telegraph,  and 
cable  companies  (including  wireless  companies) .  The  manager,  chair- 
man, or  other  officer  in  charge  of  the  association,  bureau,  etc.,  may  be 
delegated  by  the  designated  ofiicer  of  each  of  the  carriers  forming  the 
association  to  have  supervision  of  the  destruction  of  a(!Counts,  records, 


12 


DESTRUCTION   OF  RECORDS. 


and  memoranda  of  the  association,*  etc.,  and  in  that  event  he  shall 
issue  all  authorities  for  such  destruction,  and  certificates  of  destruc- 
tion shall  bo  filed  with  him.  Otherwise,  a  written  authority  for  the 
destruction  of  accounts,  records,  and  memoranda  shall  he  secured 
from  the  proper  officer  of  the  member  carriers  concerned  and  a  certifi- 
cate of  destruction  shall  be  filed  with  each  such  officer. 

Note. — Records  of  interline  business  conducted  over  the  lines  of  two  or  more  com- 
panies should  not  be  confused  with  the  records  of  so-called  joint  agcncios.  A  joint 
agency  as  referred  to  in  the  above  paragraph  contemplates  a  separate  organzation  or 
association,  with  officers  or  employees  distinct  from  those  of  the  operating  company 
and  not  agencies  or  offices  maintained  jointly  by  two  or  more  seperate  companies  for 
operating  efficiency. 

Nonoperating  companies. 

16.  A  company  owning  or  controlling  telephone,  telegraph,  or  cable 
plants,  whether  wire  or  wireless,  which  it  does  not  operate  but  which 
it  leases  to  others  for  operating  purposes  shall  observe  these  regula- 
tions in  case  it  desires  to  destroy  any  of  its  corporate  or  financial 
accounts,  records f  or  memoranda. 

Method  of  destruction. 

17.  The  precise  method  of  the  destruction  of  accoimts,  records,  or 
memoranda  is  not  prescribed.  The  Commission  is  not  concerned 
with  the  method  of  destruction,  whether  by  fire,  sale,  or  otherwise, 
so  long  as  the  destruction  is  authorized  and  a  certificate  of  destruc- 
tion is  filed  as  required  by  these  regulations.  If  the  accounts,  rec- 
ords, or  memoranda  are  not  actually  destroyed  by  the  carrier  but 
are  disposed  of  by  sale  or  otherwise,  the  certificate  of  destruction 
shall  so  state. 

Accidental  destruction  of  accounts,  records,  and  memoraEda. 

18.  If  any  accounts,  records,  or  memoranda  are  destroyed  acci- 
dentally by  fire,  flood,  or  other  calamity,  a  statement  shall  be  pre- 
pared listing,  as  far  as  may  be  possible,  the  records  destroyed,  and 
detailing  thei  circumstances  in  connection  with  the  fire  or  other 
calamity.  This  statement  shall  be  authenticated  by  an  officer  or 
some  responsible  employee  of  the  company  and  shall  be  filed  with 
the  officer  having  supervision  of  the  destruction  of  accounts,  records, 
and  memoranda.  A  copy  of  the  statement  shall  bo  filed  promptly 
with  the  Commission. 

Duplicate  accounts,  records,  and  memoranda. 

19.  Provision  is  made  in  item  127  of  paragraph  20  for  the  optional 
destruction  of  duplicate  copies  of  accounts,  records,  and  memoranda 
when  such  copies  are  not  specifically  provided  for  elsewhere  in  these 
regulations  and  when  they  contain  no  information  not  shown  on  the 
originals.  In  destroying  such  copies  carriers  may  dispense  with  the 
written  authorities  and  the  certificates  of  destruction.  The  originals 
(or  one  tme  copy)  shall  be  retained  for  the  respective  periods  named 
for  such  records  in  the  regulations. 


DESl RUCTION   OF   KF.CORDS. 


13 


I 


I 


List  of  accounts,  records,  and  memoranda,  and  periods  of  retention. 

20.  The  following  is  the  list  of  accounts,  records,  and  memoranda  of 
telephone,  telegraph,  and  cable  companies  (includino  wiivlo->s  compa- 
nies) specifically  referred  to  by  theregulatioiLs  embodied  in  paragraph  1. 
The  classification  of  accounts,  records,  and  memoranda  enumerated 
below  under  the  various  general  headings  is  m-rely  for  convenient 
reference  and  is  more  or  less  arbitrary.  The  regulations  arc  intended 
to  apply  to  the  items  as  named  or  described,  regardless  of  the  classi- 
fication and  regardless  of  where  filed.  Of  the  accounts,  records,  and 
memoranda  which  are  to  be  retained  permanently  only  the  more 
important  are  indicated  in  the  list,  such  specific  mention  being  made 
so  that  they  may  not  be  confused  with  any  accounts,  records,  or 
memoranda  which  the  carrier  is  hereby  given  permission  to  destroy. 


Description  of  accounts,  etc. 


OEN'ERAL   AND   FINANCIAL. 

1.  Ledgers:  ,    •    , 

(a)  General  and  auxiliaiy  ledgers  and  indexes 
thereto,  except  subscribers'  and  other  ledgers 
provided  for  in  items  below. 

(6 )  Balance  sheets  of  general  ledgers 

(c)  Trial  balance  sheets  of  general  and  auxiliary 

ledgers. 

(d)  Subscribers'  and  pay  station  ledgers  and  other 

records  used  in  lieu  thereof, 
(f )  Customers'  ledgers  at  local  telegraph  offices,  local 

cable  offices,  local  wireless  otlices.  and  other 

agencies. 
(/)  Trial  balance  sheets  of  ledgers  covered  by  items 

((/)  and  (e)  above. 

2.  Records  of  securities  owned: 

Record.-^  of  secuiitio?  owned,  in  treasury,  or  with 
custodians. 
S.  Journals: 

General  and  auxiliary  journals 

4.  Cash  books:  ,,11         j 

(a)  Treasurers'  and  auditors'  general  cash  books  and 

auxiliary  cash  books  subsidiary  to  the  general 

cash  books. 

(6)  Other  auxiliary  cash  books 

(c)  Cash  books  at' telephone  exchanges,  telegraph 

and  cable  and  wireless  offices,   and    other 

agencies. 

Note  —If  any  receipts  or  payments  are  entered  in  tlie  aggregate 
in  cash  books  and  are  detailed  only  on  loose  sheets,  such  loose 
sheets  comtitute  an  auxiliary  cash  boolc  when  no  other  perma- 
nent record  of  the  items  thereon  is  made. 


5. 


Capital  stock  records: 
(a)  Capital  stock  ledgers 


)  _,, „ 

(b)  Records  or  stubs  of  capital  stock  certificates. 


(c)  Stock  transfer  registers. 

(rf)  Memoranda  and  bills  of  sale  or  of  transfer  of  capi- 

tal  stock 
(«)  Capital  stock  subscription  notices  and  requests 

for  allotment. 

(/)  Canceled  capital  stock  certificates 

Bond  records: 

(a)  Registered  bor\d  ledgers 

(6)  Records  or  stubs  of  bonds 


Period  to  be  retained. 


Permanently. 

Permanently. 
Permanently. 

3  years. 

3  years. 


3  years. 


Permanently. 

Permanently. 
Permanently. 


3  years. 
3  years. 


Permanently. 
Permanently. 
Permanently. 
3  years. 

1  year. 

See  item  16. 

Permanently. 
Permanently. 


14 


DESTKUCTION   OF  RECORDS. 


Description  of  accounts,  etc. 


GENERAL  AND  FINANCIAL-  Continued. 

6.  Bond  records — Continued. 

(e)  Memoranda  and  bilk*  of  sale  or  of  transfer  of 

rejjistered  bonds. 
(d)  Funded  debt  subscription  notices  and  requests 

for  allotment. 
(€)  Records  of  interest  coupons,  paid  and  un^>aid.. 
(J)  Canceled  bonds  and  paid  interest  coupons , 

7.  Copies  of  applications  to  and  authorities  from  re^ilat- 

mg  bodies  for  the  issuance  of  stocks,  bonds,  and 
other  securities.     (See  item  llOe.) 

8.  Proxies  and  voting  lists: 

(a)  Proxies  of  holders  of  voting  securities 

(6)  Lists  of  holders  of  voting  securities  presented  at 
meetings. 

9.  Journal  entries: 

(a)  Journal  entries  and  interdepartmental  bills  and 
supporting  jmpers. 

(6)  Slips  or  statements  jiving  advance  postini^  of 
miscellaneous  receipts  and  payments  of  funds. 

(c)  Records  of  prepaid  expenses  and  of  accrued  lia- 
bilities not  due,  used  for  monthly  apportion- 
ment of  such  items,  but  not  constituting  sup- 
porting papers  covered  by  item  (a)  above. 

10.  Accounts  receivable  records: 

(a)  Record  or  register  of  accounts  receivable  bills 
except  as  covered  in  items  1  {d)  and  (>)  and 
indexes  thereto,  and  summaries  of  distribution 
of  credits  through  bills  for  entry  in  general 
books. 

(6)  Accounting  department  copies  of  bills  issued  and 
supporting  paners  which  do  not  accompany 
the  original  bills,  except  bills  for  service  cov- 
ered by  item  41  (6)  ana  (c),  if  recorded  in  rec- 
ords covered  by  item  (n)  above.     (Seeitem  20.) 

(c)  Authorizations   for  accounts  receivable  ^bills, 

other  than  supporting  papers,  with  notations 
of  dates  of  issue. 

(d)  Record  or  index  of  bills  to  be  issued  with  nota- 

tions of  dates  of  issue. 
(«)  Peri<xlical  statements  of  unsettled  accounts,  ex- 
cept trial  balance  sheets. 

11.  Minute  books: 

Minute  books  of  stockholders',  directors',  and  di- 
rectors' executive  committee  and  other  meetinn. 

12.  Codes: 

(a)  General  codes  (official  copies) 

(b)  Money  transfer  service,  and  similar  codes  (offi- 

cial'copies). 

13.  Titles  and  franchises: 

Deeds  and  other  title  papers  and  franchisee 

14.  Contracts  and  agreements: 

(a)  Contracts,  leases,  and  agreements,  except  those 
provided  for  in  items  18.  20,  71,  and  SO. 

(6)  Contracts  and  agreements  with  employees  for 
the  purchase  of  securities;  and  reports  and 
memoranda  pertaining  thereto. 

(f )  Card  or  book  records  of  contracts,  leases,  and  agree- 

ments made  and  of  expirations  and  renewals. 

(d)  Summaries  and  abstracts  of  contracts.  Upases,  and 

agreements  covered  by  items  (a)  uid  (b)  above. 

15.  Permits: 

(a)  Permits  and  granted  applications  for  the  use  ol 
facilities  of  others. 


Period  to  be  retained. 


DKSTHUCTIOX   OF   RECORDS. 


15 


Description  of  accounts,  etc. 


Period  to  be  retained. 


S  years. 

1  year. 

7  years. 
See  item  16. 
Permanently. 


2  years. 


6  years. 

Permanently. 

1  year  after  current  year. 

1  year  after  current  year. 


Pcamanently. 


6  years. 


3  years. 

Opjtional. 
Optional. 

Permanently. 

Permanently 
6    years   after    cancella- 
tion. 

Permanently. 

6  years  after  expiration 

or  cancellation. 
6  years  after  expiration 

or  cancellation. 

6  yean  after  expiration 

or  cancellation. 
Optional. 


3  years  after  expiration 
or  cancellation. 


GENERAL  AND   FINANCIAL — COUtinUcd. 

15.  Permits — Continued. 

(6)  Copies  of  permits  and  appl  ications  granted  others 
lor  the  use  of  the  carrier's  facilities. 

(c)  Applications  for  the  use  of  facilities  not  granted 

and  copies  of  such  applications. 

(d)  Permits  of  a  temporary  nature,  from  municipal 

or  other  bodies  to  perform  specific  work,  such 
as  permits  to  open  streets  and  place  poles  and 
copies  of  petitions  for  such  permits. 
IG.  Retired  securities: 

Canceled  stock  certificates,  bonds,  notes,  interest 
coupons,  receiver's  certificates,  and  temporary 
certificates. 


18. 


17.  Fidelity  bonds: 

Records  and  files  of  fidelity  bonds  of  employees. . . . 
Insurance  records: 

(a)  Schedules  of  fire  and  other  insurance,  also  rec- 
ords relating  to  premiums  and  amounts  recov- 
ered and  papers  substantiating  claims  against 
insurance  companies. 

(6)  Fire,  liability,  automobile,  and  other  insurance 
policies. 

(c)  Record  of  policies  in  force  and  notices  of  changes 
in  and  cancellation  of  such  policies. 

(rf)  Inspectors'  reports  and  records  of  condition  of 
property. 

(e)  Letter,  telegraphic  or  wireless  reports  of  fire 
damages. 

(/)  Reports  of  minor  losses  by  fire  not  covered  by  in- 
surance or  less  than  minimum  amount  collect- 
ible. 

(g)  Watchmen's  reports  and  other  minor  reports  and 
memoranda  pertaining  to  insurance  and  dam- 


age. 


t 


( 


(h)  Records  and  statements  relating  to  insurance  re- 
quirements. 

19.  Tax  records: 

Copies  of  schedules  and  returns  to  taxing  author- 
ities for  tax  purposes  and  records  of  appeals. 

20.  Plant  and  eauipment  (fixed  capital*)  records: 

(a)  Recoras  and  memoranda  of  tno  cost  and  of  the 

inventory  value  of  plant  and  equipment. 
(6)  Records  and  memoranda  pertaining  to  deprecia- 
tion, retirement,  and  replacements  of  plant 
and  equipment. 

Contracts  and  other  agreements  relating  to  the 
construction,  acquisition,  or  sale  of  plant  and 
equipment. 

Recoras,  reports,  summary  sheets,  statements, 
distribution  sheets,  and  similar  records  and 
papers  directly  supporting  debits  and  credits 
to  plant  and  equipment  accounts. 

Records,  reports,  and  papers  pertaining  to  the 
detail  of  debits  and  credits  to  plant  and  equip- 
ment accounts  such  as  time  tickets,  time 
check  rolls,  workmen's  reports,  work  orders, 
material  disbursement  ana  recovery  tickets, 
and  other  preliminary  and  underhing  records 
if  the  details  of  jsuch  debits  and  credits  have 
been  summarized  to  records  covered  by  items 
(a)  to  (rf)  above  in  such  a  manner  as  will  pre- 
aerve  a  complete  record  of  the  transaction. 


(0 


id) 


(e) 


3  years  after  expiration 

or  cancellation. 
Optional. 

Optional. 


May  bo  destroyed  at 
option  of  carriers  upon 
complying  with  re- 
quirements of  para- 
graph 12. 

3  years  after  expiration. 

G  years. 


Optional. 

3  years  after  expiration. 

3  years. 

Optional. 

Optional. 

Optional. 

Optional. 

G  years. 

Permanently. 
Permanently. 

Permanently. 

Permanently, 

3  vears. 


16 


DESTRUCTION  OF  RECORDS. 


DESTRUCTION  OF  RECORDS. 


17 


Description  of  accounts,  etc. 


GENERAL  AND  FINANCIAL — Continued. 

20.  Plant  and  equipment  (fixed  capital)  records— Contd. 

(/)  Book  or  card  records,  showing  measurements, 
description,  location,  (|uantitie8,  etc.,  of  phys- 
ical plant  and  equipment  owned. 

Note.— All  accnnnts,  records,  aod  memoranda  requisite  for 
making  a  complete  analysis  of  cost  of  plant  and  equipment 
shall  be  retained  permanently.  If  any  «>f  the  accounts,  records, 
and  memoranda,  elsewhere  provided  for  in  these  regtUatioos, 
are  of  this  character,  they  snail  be  retained  permanently  re> 
gardless  of  any  lesser  period  of  retention  assigned  to  them. 

21.  Authorities  for  expenditures: 

(a)  Estimates,  completion  reports,  and  authorities 
for  expenditures,  and  registers  and  records 
thereof,  for  construction,  extensions,  additions, 
and  betterments  made. 

(6)  Detail  records  and  memoranda  used  in  prepara- 
tion of  estimates  and  minor  reports  and  state- 
ments pertaining  thereto,  if  summarized  in 
records  covered  by  item  (a)  above. 

(c)  Estimates,  detail  reconls,  and  memoranda  and 

reports  pertaining  thereto,  when  the  expendi- 
tures were  not  authorized,  except  as  covered 
by  item  22. 

(d)  Eecords,  reports,  and  statements  showing  com- 

parison between  authorized  estimates  and 
actual  expenditures. 

(e)  Notices  of  the  approval  of  estimates 

(f)  Records  and  reports  pertaining  to  the  progre«i 

of  construction  work,  the  order  in  which  jobs 
are  to  be  completed,  orders  to  expedite  spe- 
cific work,  reports  and  statements  of  com- 
pleted and  uncompleted  work  orders,  and 
similar  records  which  do  not  form  a  basis  of 
charges  or  credits  to  the  accounts. 

22.  Engineering  records: 

(a)  Maps,  profiles,  plans,  specifications,  estimates 
of  work,  records  of  engineering  studies,  unit 
costs,  and  similar  records  pertaining  to  projects 
which  have  been  put  into  execution,  whether 
in  whole  or  in  part. 

(6)  Maps,  profiles,  plans,  specifications,  estimates 
of  work,  recoras  of  engineering  stu^lies,  and 
similar  records  pertaining  U:>  projects  wliich 
have  been  abandoned. 

23.  Traveling  accountants'  and  auditors'  reports: 

(a)  Reports  of  examinations  and  audits  by  special 
accountants  and  traveling  auditors. 

(6)  Reports  and  records  of  incidental  and  miscel- 
laneous audits, 

24.  Di\'i8ion  auditors'  reports: 

Reports  and  statements  from  division  auditors  of 
revenues,  expenses,  receipts,  disbursements 
operations,  anci  similar  items. 

TREASURY. 

30.  Statements  of  funds  and  deposits: 

(a)  Statements  and  summaries  of  balances  on  hand 

and  with  depositaries. 
(6)  Authorities  for  aiul   statements  of  transfer  of 

funds  from  one  depositary  to  another, 
(c)   Periodical  statements  of  working  cash  balances. . 


Period  to  be  retained. 


Permanently. 


Description  of  accounts,  etc. 


Permanently. 


3  years. 


Optional. 


Permanently. 


Optional. 
Optional. 


Permanently. 


6  yean. 


TREASURY— continued. 

30.  Statements  of  funds  and  deposits— Continued. 

(d)  Requisitions  and  receipts  for  fimds  furnished 
managers,  agents,  ana  others. 


(c)   Reports  and  estimates  of  working  funds  required . 
(/)  Statements  of  managers'  and  agents'  deposits, 

grouped  by  depositaries. 
31.  Records  of  deixwits  with  banks  and  others: 

(a)  Statements  from  depositaries  regarding  funds 

received,  disbursed,  and  transferred. 
(6)  Bank  reconcilement  papers 

(c)  Statements  from  banks  of  interest  due  on  average 

daily  balances. 

(d)  Bank  depasit  books  and  stubs,  ledgers,  or  rec- 

ords of  checks. 

(e)  Copies  of  bank  deposit  slips 

if)  Aclvice  of  deix)8it8  made,  when   information 

contained  thereon  is  shown  on  other  records 

which  are  retained. 
(g)  Correspondence  and  memoranda  relating  to  the 

stopping  of  payment  of  bank  checks  and  to  the 

iasuance  of  duplicates. 
Records  of  receipts  ana  disbursements: 

(a)  Daily  or  other  periodical  statements  of  the  re- 

reipt  and  disbursement  of  funds.     (See  note, 

item  4.). 
(6)  Records  or  periodical  statements  of  outstanding 

vouchers,  chocks,  drafts,  etc.,  issued  and  not 

j)resoiited. 

(c)  Cash  remittance  slips  or  reports  of  managers  and 
agents  and  general  office  summaries  thereof. 

(d)  Voucher  lists,  showing  mailing  dates  and  to 
whom  sent. 

Managers'  and  agents'  balances: 

Records  of  managers'  and  agents'  accounts  showing 
working  fund  debits  and  credits  from  various 
sources. 
34.  Field  cashiers'  balances: 

Reports  of  working  fimd  balances  in  hands  of  field 
cashiers. 
Records  pertaining  to  verifications  of  treasurers'  cash 
or  pocurities. 

REVENUES. 


iy.i 


35. 


3  years. 
Optional. 


For  the  period  prescribed 
lor  the  records  to 
which  they  pertain. 


3  years. 
3  years. 
3  yean. 


( 


Period  to  be  retalneJ. 


40.  Revenue  Bumniaries: 

(a)  Records  and  summaries  of  revenues  (by  classes) 
for  entry  in  general  books. 

(6)  Reports  from  managers,  agents,  and  others  show- 
ing debits  and  credits  to  revenue  from  all 
sources,  and  summaries  of  such  reports. 

(c)  Statements  and  summaries  of  telephone  or  A^-ire- 
less  message  toll  cliarge  tickets  and  telegram 
or  cable  charge  tickets,  if  summarized  into 
records  covered  by  item  (a)  or  (6)  above. 

41.  Collection  reports  and  records: 

(a)  Itemized  lists  and  summaries  of  collections  of 
operating  revenues  by  ugonts,  collectors,  and 
branch  ofticos. 


15209^—1^- 


3 


May  be  destroyed  at  op- 
tion of  carrier  after 
funds  have  been  re- 
turned or  accounted 
for. 

Optional. 

3  years. 


3  years. 

3  years. 
3  years. 

6  years. 

3  years. 
Optional, 


C  years. 

3  years. 

G  years. 

3  years. 
Optional. 

3  years. 

3  years. 
3  years. 


6  years. 
3  years. 

1  year. 


'A  years. 


18 


DESTRUCTION   OF  RECORDS. 


Description  of  acc3unt8,  etc. 


REVENUES — continued. 

41.  Collection  reports  and  records — Continued. 

(6)  Bill  stuKs.  copies  of  bills,  collection  ticket*,  col- 
lection books,  and  other  forms  of  reporting  col- 
lertions  covered  by  item  (a)  above. 

(c)  Bill  stubs,  copies  of  bills,  and  statements  of  col- 
lections of  operating  revenues  not  used  for  re- 
porting collei'tions  covered  by  item  (a)  above. 

{d)  Statements  and  reports  of  amounts  collected  or 
due  from  employees  for  meals  furnished. 

(«)  Records  of  coin  box  collection  books,  coin  box 
combinations,  seals  applied  and  removed  from 
coin  boxes,  and  similar  records,  and  reports 
relative  to  the  collection  of  operating  reve- 
nues. 

(/)  Records  of  ratings,  credit  classification  and  in- 
vestigations of  patrons  and  prospective  sub- 
scribers. 

(g)  Reports  relating  to  the  status  of  subscribere* 
and  customers'  accoimts. 

42.  Remittances  and  deposits: 

Local  office  records  of  remittances  and  deposits 

43.  Adjustments  with  agents: 

Dt^tail  records  and  reports  of  adju.stmentswith  man- 
agers, ngents.  and  other  employees  on  account 
of  revenue,  disbursements,  or  other  items. 

44.  Subscribers'  and  customers'  account  adjustments: 

Detail  records  of  adju.stments  of  accounts  of  sub- 
scribers and  other  rustoraers  for  overcharges, 
undercharges,  and  other  errors,  results  of  which 
have  been  transcribed  to  records  covered  by 
item  40. 

45.  Settlements  with   telephone,   telegraph,    cable,  and 

wireless  companies: 

(a)  Records  pertaining  to  settlement  of  revenues  and 
other cfiarges  with  telephone,  telegraph,  cable, 
and  wireless  companies  by  officers,  managers, 
and  agents. 

(6)  Statements,  summaries,  and  memoranda  per- 
taining to  the  monthly  record  of  inter-company 
business  if  summariz«<i  in  records  covered  by 
item  (a)  above. 

46.  Settlements  with  transportation  companies: 

(a)  Monthly,  annual,  or  other  periodical  settlements 
with  tmns{)ortat  ion  companies  made  in  accord- 
ance with  contracts  or  agreements. 

(6)  Reports  of  receipts  and  expenditures  at  offices 
on  lines  of  tran.sportation  companies. 

47.  Check  and  error  records  of  messages: 

Check  records,  check  reports,  error  notices,  error 
statements,  and  other  records  of  telephone,  t«le- 
graph,  cable,  and  wirele^  messages  pertaining  to 
the  checking  of  messages  between  offices. 

48.  Uncollectible  accounts: 

Records  and  reports  pertaining  to  uncollectible  ac- 
counts, including  authorities  for  writing  off  the 
amounts  of  such  accounts. 

49.  Allowance.^  for  service  irregularities: 

Summaries  by  accounting  classification  of  allow- 
ances to  subsr^ribers  and  agents  on  account  of  serv- 
ice interruption,  stoppage,  and  other  irregulari- 
ties of  service. 


Period  to  be  retained. 


1  year. 

Optional. 

Optional. 
Optional. 


DESTRUCTION   OF   RECORDS. 


19 


Description  of  accounts,  etc. 


Period  to  be  retained. 


1  year. 

Optional. 

3  years. 
3  years. 

3  veara. 


6  v«ari. 


6  montlis. 


6  years. 
6  years. 
Optional. 


I 


6  years. 


G  years. 


f 


REVENUES — continued. 

50.  Subscribers'  ledger  sources: 

Accounting  department  copies  of  contmct  or  line 
orders,  transfer  memoranda,  subscribers'  and 
agents'  account  charge  advices,  authorities  for 
charges  to  subscribers  under  contracts,  and  other 
records  from  which  telephone  subscribers'  ledgers 
are  built  up  or  corrected. 

EXrENDITURE8. 

00.  Vouchers: 

(a)  Register  of  auditcfl  vouchers  and  indexes  thereto 
and    summaries   of   distribution   of   charges 
through  vouchers  for  entry  in  general  books. 
(6)  Paid  drafts,  paid  checks,  and  receipts  for  cash 

paid  out.     (See  note  under  item  20.) 
(r)   Paid  and  canceled  vouchers,  audit  office  copies 
of  vouchers,  analysis  sheets  showing  detail  dis- 
tribution of  charges  on  individual  vouchers, 
and  other  supporting  papers, 
(rf)  Authorities  for  tlie  payment  of  specific  vouchers. . 
(e)  Records  or  index  of  vouchers  to  be  made  with 

notations  of  dates  of  issue. 
(/)  Lists  of  unaudited  bills  (accounts  payable),  lists 
of    vouchers    transmitted,    and    memoranda 
regarding  changes  in  unaudited  vouchers, 
(il.  Distribution  of  labor  expenditures: 

Journal"',  ledgers,  or  other  records  sho^^'ing  the  de- 
tailed distribution  of  labor  expenditures,  inchid- 
iiig  memoranda  and  memorandum  recapitulation 
sheets.     (See  item  20.) 
fi'J.   Labor  records: 

Time  books,  time  sheets,  time  tickets,  time  cards, 
work  orders,  overtime  tickets,  job  tickets,  check 
rolls,  workmen's  reports,  and  other  similar  papers 
pertaining  to  services  of  officers  and  employees. 
(See  item  20.) 
(i;;.  Pay  roll  records: 

(a)  Pay  rolls  and  summaries.     (See  item  20) 

(h)  Applications  and  authorities  for  changes  in  pay 
rolls;  lists,  siunmaries  and  reports  of  changes 
in  pay  rolls  and  records  of  authorized  positions. 
Applications  for  pay  roll  clianges  not  authorized. 
Records  and  raemora^ida  pertaining  to  deduc- 
tions from  pay  rolls. 
(e)  Receipted  pay  checks,  receipted  time  tickets, 
certificates  issued  for  wages,  discharge  ticketa, 
and  other  evidences  of  payments  for  services 
rendered  by  employees. 
(/)  Comparative  or  analytical  statements  of  pay  rolls. 
(g)  Receipts  for  pay  rolls  and  pay  checks,   also 
records  thereof. 
64.  Distribution  of  expenditures  for  material  and  supplies: 
(a)  Journals,   ledgers,   and  other  records  showing 
the  detailed  distribution  of  expenditures  for 
material  and  supplies  including  memoranda 
and     memorandum     recapitulation     sheets. 
(See  item  20.) 
(6)  Work  orders,  job  tickets,  workmen's  reports, 
material    disbursement    tickets,    and    other 
papers  covering  the  application  of  material 
and  supplies,  if  transcribed  in  detail  to  records 
covered  in  item  (n)  above.     (See  item  20.) 


3  vears. 


% 


( 


Permanently. 

6  years. 
Permanent  I  v. 


3  years. 
Optional. 

Optional. 


C  vears. 


o  vears. 


6  years. 
6  vears. 


Optional. 
Optional. 

6  years. 


3  >'ears. 
Optional. 


G  years. 


3  vears. 


20 


DESTRUCTION  OF  RECORDS. 


DESTRUCTION  OF  RECORDS. 


21 


Description  ol  accounts,  etc. 


EXPENDITURES— continued. 

65.  Assignments,  attachments,  and  garnishments: 

(a)  Record  of  assignments,  attachments,  and  gar- 

nishments of  employees'  salaries. 

(6)  File:^  containing  as-signments,  attachments,  gar- 
nishments, notices  of  suits,  notices  of  release, 
and  correspondence  relating  thereto. 

(c)  Minors*  salary  releases 

66.  Authorized  expenses: 

(o)  Records,  statements  and  advices  of  authorized 
expenses  by  divisions,  districts,  departments, 
offices,  and  otherwise,  which  form  the  basis 
of  charges  to  accounts. 

(b)  Requests  and  authorities  for  expenditures  for 

incidental  expenses,  repairs,  etc.,  not  cov- 
ered by  estimates  provided  for  in  item  21, 
and  not  used  for  msJcing  charges  to  account*. 

67.  Claims: 

(a)  Claims  registers,  card  or  book  indexes,  and 
other  records  in  connection  with  the  record- 
ing of  overcharge,  damage,  personal  injury, 
and  other  claims  presented  against  carriers, 
except  as  provided  for  in  item  44. 

(6)  All  papers  substantiating  claims,  whether  such 
papers  are  attached  to  vouchers  or  filed  sep- 
arately (see  item  60r),  except  as  provided  for 
in  item  44. 

Note.— It  is  not  Intended  that  documents  comprising  claims, 
sub-stantiating  their  validity,  or  accnmulatcd  in  the  progress 
of  investigation  shall  be  retained  permanently. 

68.  Records  of  accidents,  damages,  and  injuries: 

(a)  Reports  and  statements  regarding  accidents, 
when  not  necessary  to  support  claims  or 
vouchers.     (Sec  item  123.) 

(6)  Records  of  damages  to  company  property  or 
property  of  others,  also  reports  and  state- 
ments of  employees  and  witnesses  regarding 
damages  to  company  property  or  property  of 
others,  when  not  necessary  to  support  claims 
or  vouchers. 

(c)  Reports    and    statements    regarding    personal 

injuries,  when  not  necessary  to  support  claims 
or  vouchers. 

• 

PURCH.^SES   AND   STORES. 

70.  Material  ledgers: 

(a)  Records  of  material  and  supplies  on  hand 

(6)  Balance  sheets  of  material  and  Fuj)]>lies  received, 
issued,  and  on  hand  at  branch  sup])ly  de- 
partments. 

71.  Purchases  and  sales: 

(a)    Copies  of  orders  for  the  purchase  of  material 

and  supplies. 
(6)    Invoice.^  for  material  and  supplies  purchased, 

and  records  or  reports  of  such  invoices. 

(c)  Authorities  for  the  sale  of  scrap  and  material 

and  supplies. 

(d)  Price  recf>rds  of  purchases  (file  copies) 

(e)  Advices  from  individuals  and  comi)anies  ac- 

knowledging receipt  of  orders  for  material 
and  supplies,  notices  of  shipment,  packing 
slips,  and  copies  of  bills  of  lading. 


Period  to  be  retained. 


Description  of  accounts,  etc. 


Period  to  be  retained. 


3  years. 
3  years. 

Optional. 
Permanently. 

Optional. 


Permanently. 


6  years  after  settlement 
or  rejection. 


/ 


Optional. 
Optional. 


Optional. 


Permanently. 
3  years. 


3  years. 

Permanently. 

3  years. 

Permanently. 
Optional. 


)      f 


PURCHASES  AND  STORES — Continued. 

71.  Purchases  and  sales — Continued. 

(/)  liids  and  offers  for  the  sale  or  purchase  of  ma- 
terial and  supplies. 

(g)  Contracts  for  the  purchase  or  sale  of  material 
and  supplies. 

(h)  Advices  or  requisitions  from  storekeepers  and 
others  for  the  purchase  of  material  and  sup- 
plies. 

(t)  Lists  or  records  of  invoices  transmitted  to  or 
from  storekeepers. 

0)  Receipts  or  delivery  tickets  issued  for  material 
and  supplies  received  in  installments  and 
subsequently  surrendered  with  and  in  sup- 
port of  invoices  or  bills  showing  full  infor- 
mation. 

(h)  Freight  bills  covering  charges  on  material  and 
supplies. 

NoTK.— The  fumishin<»  of  freij^ht  bills  in  support  of  claims  on 
transDortation  companies  is  not  con.sidere<l  a  destruction  of 
records,  provided  copies  of  such  bills  are  retained  fn  lieu 
thereof. 

(/)  Copies  of  notices  to  supply  houses  of  material 
and  supplies  returned  for  credit  or  repair. 

(m)  Copies  of  shipping  instructions  and  acknowl- 
edgments thereof. 

(n)  Summaries  and  distribution  sheets  and  credit 
memoranda  of  material  and  supplies  sold  or 
returned  to  supply  houses  for  credit. 

(o)  Records  and  reports  used  for  checking  and 
tracing  material  and  supplies  covered  by 
invoices  provided  for  in  item  (b)  above. 

72.  Material  and  supplies  received  and  issued: 

(a)  Records  and  reports  of  materials  and  supplies 
received. 

(6)  Records  and  reports  of  materials  and  supplies 
iftsuod. 

(c)  Records  and  reports  of  materials  and  supplies 
transferred  from  one  department,  storeroom, 
or  division  to  another. 

(rf)  Reqiii.sitions  and  rocc'ipts  for  materials  and  sup- 
plies Issued  and  receipts  for  materials  and  sup- 
plies returned,  if  summarized  into  records 
covered  by  items  (a)  and  (6)  above,  except  as 
provided  for  in  item  20. 

(<)  Price  records  of  materials  and  Eupplics  issued 
(file  copies). 

(/)  Records  and  reports  of  materials  recovered  and 
returned  to  stock,  if  transcribed  in  detail  to 
records  covered  in  item  (a)  above. 

(g)  Records  of  inspecting  and  testing  materials  and 
supplies. 

{h)  Minor  records  and  reports  pertaining  to  ma- 
terials and  supplies,  not  involving  costs  or  dis- 
position, such  as  reports  of  unfilled  requisi- 
tions, authorities  for  additions  to  stock,  store- 
room records  of  requisitions,  estimates  of  future 
requirements,  articles  required  by  field  forces, 
records  of  material  disbursement  and  recovery 
tickets  used  and  on  liand,  and  similar  records. 

(i)  Records  and  reports  of  materials  and  supplies 
issued  to  individuals  or  gangs  of  employees  to 
be  accounted  for  when  the  materials  and  sup- 
plies are  applied  or  returned  to  stock. 


3  years. 
Permanently, 
3  years. 

Optional. 
Optional. 


Permanently. 


Optional. 
Optional. 
Permanently. 

Optional. 

Permanently. 
Permanently. 
3  years. 

1  year. 


Permanently. 
3  years. 

3  years. 
Optional. 


Optional  after  being  ac- 
counted for. 


22 


DESTRUCTION    OF   RECORDS. 


Description  of  accounts,  etc. 


(6) 

(d) 


PURCHASEa  AND  STORES— Continued. 

73.  Inventories  of  materiab  and  supplies: 

(a)  General  inventories  of  materials  and  supplies  on 

hand,   with  record  of  adjustments  between 

accounts.    (See  item  20). 
(6)  Stock  cards,  inventory  cards,  and  other  detail 

records  pertaining  to  the  taking  of  inventories, 

if  abstracted  into  records  covered  by  (a)  above, 
(c)  Minor  inventories  of  materials  and  supplies  on 

hand,  and  reports  and  memoranda  relating 

thereto,  if  not  used  for  adjustments. 
{(l)  Records,  reports,  statements,  and  summaries  of 

overstock  items. 

OPERATIO.WS. 

80.  Contracts  with  subscribers  and  customers: 

(a)  Contracts  and  records  thereof  with  subscribere, 
employees,  and  others,  for  telephone  service 
and  applications  used  in  lieu  of  such  contracts. 
Applications  for  telephone  service  for  which 

contracts  have  been  executed. 
Contracts  for  pri\'ate  wires,  time  service,  stix-k 
and  other  market  reports,  and  similar  matters; 
also  applications  and  records  pertaining  to 
such  contracts. 
Diaji-ams  perUining  to  contracts  covere<l  by 
item  (c)  above. 

(e)  Contracts  with  subscribers  ami  others  for  adver- 
tising fcpace  in  directories  and  other  publica- 
tions issued  by  the  carrier. 

(/)  (k>ntracts  l)etween  wireless  companies  and  ship- 
owners for  wireless  equipment  and  wireless 
service. 

((J)  Applications  for  telephone  service  for  which  no 
contracts  have  been  executed. 

(h)  Contracts  for  lease  of  instriunents,  including 
receipts  for  instruments  burnished  under  the 
terms  of  such  contracts. 

81.  Records  of  subscribers: 

Address  lists  and  card  records  of  subscribers  by  ad- 
dresses, names,  or  telephone  numbers,  and  similar 
lists  and  records  of  former  subscribers. 

82.  Records  of  instruments: 

Records  and  rep  arts  of  instruments  and  equipment 
furnished  to  subscribers  and  patrons  and  of  matru- 
ments  and  ecjuipment  on  vacant  premises,  not 
use<l  to  build  up  or  correct  ledger  accounts. 
8:i.  Telegrams  and  cablegrams: 

(a)  Original  filed  telegraph  and  cable  mes.sage<»  trans- 
mitted  at  public  tariff  rates,  inchulingday  and 
night  messages,  day  and  night  letters,  money- 
tninsfer  messages,  stock  and  commercial  news 
messages,  deferred  half-rate  cablegrams,  cable 
letters,  and  week-end  cable  letters;  also  press 
mea'^gos  and  Government  messages.  This 
item  also  covers  the  original  transcript  of  mes- 
sages received  over  telephones  for  transmis- 
sion. 

XoTK.-The  furnishing  of  original  flted  messages  to  ttie  United 
statos  (rovernmoot  in  support  of  bills  is  not  considered  a 
destruction  of  records. 

(6)  Ti.ssue  or  carbon   <(>pie.M  made  at  destination  ' 
ofiices,  of  messages  covered  by  item  (a)  above.  I 


Period  to  be  retained. 


C  years. 


1  year. 


1  vear. 


Optional, 


DESTRUCTION   OF   RECORDS. 


Description  of  accounts,  etc. 


3   years   after   cancella- 
tion. 

Optional. 

;J    year.s   after    cancella- 
tion. 


Optional. 

1    ^-ear    after    canceling 
tion. 

0  years    after    t-ancella- 
tion. 

1  voar. 

3   years   after   cancella- 
tion. 


^ 


Optional. 


Optional. 


) 


1  year. 


1  vear. 


I 


OPERATIONS — continued. 

83.  Telegrams  and  cablegrams— Continued. 

(c)  Original  filed  messages  transmitted  for  trans- 

portation companies  in  compliance  with  terms 
of  contracts;  also  tissue  or  carbon  copies  of 
such  messages  made  at  destination  offices. 

Note.— The  furnishing  of  original  filed  messages  to  transporta- 
tion companies  in  siii-port  of  settlements  under  contracts  is 
not  considered  a  destruction  of  records. 

(d)  Service  messages  relating  to  commercial  mes- 

sages, including  tissue  or  carbon  copies  of  such 

messages  ma<le  at  destination  offices. 
(«)  Original  filed  messages  transmitted  free  or  at 

reduced  rates  for  employees  and  others;  also 

tissue  or  carbon  copies  of  such  messages  made 

at  destination  offices. 
(/)  Relay  messages,  not  including  those  made  at 

junction  offices  for  transfer  to  other  companies. 
(g)  Message  tape  and  similar  devices  for  transmitting 

messages. 
(h)  Stube  of,  or  carbon  copies  of,  messages  received 

over  telephone. 

84.  Radiograms: 

(a)  Original  filed  wireless  telegraph  me.s.sages,  trans- 
mitted at  public  tariff  rates:  also  tissue  or 
carbon  copies  of  such  messages  made  at  coast 
and  ship  destination  stations. 

(6)  Service  messa^s  relating  to  commercial  mes- 
sages; al.^o  tissue  or  carbon  copies  of  such  mes- 
sages made  at  coast  and  ship  destination  sta- 
tions. 

(c)  Original   filed  messages  transmitted   for  ship- 

owners in  conipliance  with  terms  of  contracts 
(inasters'  service  messages);  also  tissue  or  car- 
bon copies  of  such  messages  made  at  coast  and 
ship  destination  stations. 

(d)  Original  filed  messages  transmitted  free    or  at 

mluced  rates  other  than  those  covered  by 
item  (c)  above;  also  tissue  or  carbon  copies  of 
such  messages  made  at  coast  and  ship  destina- 
tion stations. 

85.  Telephone  local  and  toll  tickets: 

(a)  Telephone  toll  tickets,  and  statements  forming 
basis  of  ch:  -cos  to  subscribers  and  others. 


(5)  Uncompleted  tickets,  lost  call  tickets,  switching 
tiekets,  messenger-service  tickets,  appoint- 
ment tickets,  and  tickets  for  emergency  calls, 
official  calls,  and  test  calls. 

(c)  Records  of  receipt  of  local  and  toll  tickets,  toll 

statement  stubs,  toll  ticket  memoranda,  guide 
cards,  and  reports  and  memoranda  relative  to 
investigations  and  correction  of  tickets. 

(d)  Statements  and  summaries  of  measured  service 

tickets  and  register  readings. 
(«)  Measured  service  tickets,  local  message  tickets, 

and  regi.'^ter  reading  tickets  or  statements  if 

summarized  in  records  covered  by  item  (d) 

above. 
(/)  Tickets  and  statements  for  check  error  purposes. 


23 


Period  to  be  retained. 


1  vear. 


Optional. 
3  years. 

Optional. 
Optional. 
Optional. 

15  months. 
15  months. 
15  months. 


3  years. 


Optional  after  charges 
have  been  paid  or  con- 
sidered to  be  uncollec- 
tible. 

Optional. 


Optional. 


1  year. 
Optional. 

Optional, 


24 


DK8TKWCTI0K    OF    RECOKUS. 


Description  of  accounts,  etc. 


OPERATIONS — continued. 


86. 


Period  to  be  retained. 


(c) 
(c.) 


Tariffs  and  other  rate  authorities: 

(a)  Tariffs,  rate  sheets,  division  sheets,  and  circulars 
in  which  the  company  is  interested  relative  to 
the  transmission  of  messages  and  furnishing  of 
facilities,  in  the  general  files  of  the  department 
in  which  the  complete  official  file  is  main- 
tained. 

(6)  Tariffs,  rate  sheets,  division  sheets,  and  circulars 
in  other  departments  and  at  exchanges,  branch 
offices,  and  agencies,  if  copies  of  the  same 
issues  of  such  tariffs,  etc.,  are  preserved  in  the 
general  tariff  files  referred  to  in  item  (a)  above. 
Requests  and  receipts  from  managers  and  others 
for  tariffs,  rate  sheets,  division  sheets,  and  cir- 
culars. 
Copies  of  concurrences  filed  with  the  Interstate 

C'ommerce  Commission . 
Statements,   summaries,   and  memoranda  per- 
taining to  the  establishment  of  a  basis  for  pro- 
rating joint  toll  revenue. 

(J)  Correspondence  and  working  papers  in  connec- 
tion with  the  making  of  rates  and  compilation 
of  tariffs,  rate  sheets,  division  sheets,  and  cir- 
culars affecting  the  transmission  of  messages 
and  furnishing  of  facilities. 

87.  Franks  and  message  passes  and  reduced  rate  coui>on8: 
(a)  Copies  of  orders  on  printing  house*'  for  printed 

forms  of  franks,  etc. 
Records  of  blank  form.s  of  franks,  etc.,  received, 

distributed,  and  destroyed. 
Requests,  and  copies  of  reqiiest.s,  for  franks,  etc. . 

Records  of  franks,  etc.,  issued 

Records  of  fnmks  received  from  other  companies. 

Identification  slips  for  frank.",  etc 

Used  franks,  niessagc  passes,  and  coupons,  if 
complete  record  of  issue  is  maintained  as  pro- 
vided in  item  (d)  above. 
(h)  Unexpired,    surrrendered,    or    partially    used 
franks,  etc. 

(i)  Void,  unused,  and  unissued  franks,  etc 

(j)  Reports  and  records  of  franks,  etc.,  collected  or 

honored,  and  of  free  messages  handled. 
(k)  Reports  of  reduced -rate  messages  sent  or  received . 

88.  Telegraph,  cable,  and  wireless  identification  cards: 

(a)  Records  of  identification  cards  issued 

(6)  Returned  and  \vithdrawn  identification  cards.. 
(c)  Unused  and  unissued  identification  cards 

89.  Transportation  company  passes: 

(a)  Requests,  and  copies,  for  piksses 

(6)  Record  of  passes  received  from  carriers 

(c)  Record  of  pass  identification  forms  issued 

(d)  Record  of  use  made  of  passes 

Receiving  and  delivering  telegrams  and  cablegrams: 

a)  Receivers'  record  of  messages  filed 


G  years  after  expiration 
or  cancellation. 


(6) 

(c) 
(d) 

[e 


(.1 


May  be  destroyed  at  op- 
tion of  carrier  after  ex- 
piration or  cancella- 
tion. 

Optional. 


G  years  after  cancella- 
tion. 

G  years  after  cancella- 
tion or  expiration  of 
basis. 

C  years  after  cancellation 
of  tariff,  etc. 


90 


6)  Message  delivery  records. 
(c)  Messengers'  delivery  sheets. 


91. 


(d)  Operators'  number  sheets 

Telegraph  and  cable  office  rei)oris: 

(a)  Monthly  balance  sheets  and  support  ing  papers. . 
(6)  Weekly  and  daily  balance  sheets  when  figures 

are  combined  on  monthly  or  weekly  balance 

sheets,  respectively. 


G  years. 

G  vears. 

6  years. 
G  years. 
6  years. 
3  years. 
G  months. 

1   year  after  current  year 

1  year  after  current  year. 
3  years. 

3  years. 

3  years. 
1  1  yetir. 
'  I  year  after  current  year. 

3  years. 
3  years. 
3  years. 
3  years. 

1  year. 
I  year. 
J  year. 
Optional. 


J  G  years. 
1  year. 

I 


DESTRUCTION   OF   BECORDS. 


25 


Description  of  accounts,  etc. 


OPERATIONS — continued. 


91 


(rf) 


92. 


93 


94. 


Telegraph  and  cable  office  report^} — Continued. 

(c)  Weekly  and  daily  balance  sheets  and  supporting 
papers,  when  figures  are  not  combined  on 
monthly  or  weekly  balance  dieets,  respec- 
tively. 
Daily,  weekly,  or  monthly  statements  of  re- 
ceipts and  disbursements. 

Statrracnts  of  ledger  balances 

Reports  of  guarantee<i  and  uncollected  messages, 

Cg^  Reports  of  refunded  mooMgoo 

Wireless  station  renorts: 

(a)  Coast  and  ship  station  abstracts  of  commercial 

messages  accepted . 
(6)  Coast  and  ship  station  abstracts  of  commercial 

messages  delivered, 
(c)  Coast  ai^  ship  station  abstracts  of  free  messages 

accepted, 
(rf)  Coast  nnd  ship  station  abstracts  of  free  messages 

delivered, 
(c)  Coast  station  accounts  current  and  supporting 

papers. 
(/)  Ship  station  cash  accounts  and  supporting  papers. 
Messenger  department  records: 

Records  and  reports  pertaining  to  meeeenger  service, 
including  records  of  location  and  use  of  call  boxes, 
except  records  covered  by  item  40. 
Stock  and  commercial  news  records: 

(a)  Records  and  reports  pertaining  to  stock  and 
other  market  reports,  sporting  news,  election 
returns,  and  similar  items,  other  tlian  records 
covered  by  item  40. 
(61  Bulletins,  containing  information  relative  to 
election  returns  and  sporting  news. 
Money  transfer  records: 

Records  and  reports  pertaining  to  the  transfer  of 
money  by  telegraph,  cable,  or  wirelciss,   except 
records  covered  by  item  40. 
Advertising  and  canvassing  records: 

(a)  Prospect  lists,  notices,  reports,  memoranda,  and 
records  pertaining  to  advertising  and  can- 
vassing for  service. 
Records  and  reports  pertaining  to  soliciting  of 
advertisements  in  directories  and  other  publi- 
cations of  the  carrier. 
Records  and   reports  pertaining  to  advertise- 
ments of  the  carrier  in  newspiipers,  magazines, 
and  other  publications,  including  'copies"  of 
such  advertisements. 
Records  and  reports  pertaining  to  studies  of 
methods  of  obtaining  new  business,  recovery 
of  lost  business  antl  similar  mattere. 
97.  Service  and  efficiency  records: 

(a)  Circuit  assignments,  log  books,  and  reports  of 

circuits  working,  interrupted,  etc. 
(6)  Trouble,   inspection,  and  testing  records  and 

reports, 
(c)  Performance  records,  such  as  records  and  reports 
of  traffic  loads,  lost  and  delayed  calls,  peg 
counts,  test  calls,  and  service  observation. 
(<f)  Central  office  records  of  switchboard  capacity, 
such  as  panel  and  jack  records,  and  litis  and 
records  of  available  numbeiis. 


95 


96. 


Period  to  be  retained. 


(M 


(0 


{d) 


6  years. 

3  years. 

3  years. 
3  years. 
6  years. 

6  years. 

6  years. 

6  years. 

6  years* 

G  years. 

6  years. 

3yearsf. 

3  years. 

Optional. 
3  years. 

Optional. 
Optional. 
Optional, 

Optional. 

lyear. 
1  year. 
1  year. 

Optional. 


26 


DESTRUCTION   OF   RECOKns. 


Description  of  accounts,  etc. 


Period  to  be  rettined. 


oi'KUATioNs — continued. 


97. 


(h) 


98. 


99. 


100. 


Servico  and  C'n!ti<»ucy  records — Continued. 

(e)  Chief  oporalors  recordsof  switchboard  markings. 

(/)  Reports  of  stations  ready  for  service 

ig)  Records  and  reports  of  complaints  of  eer\'ice  not 
involving  claims  for  damages  or  refunds  of 
charges.     (See  item  676.) 
Records  and  reports  pertaining  to  studies  in  con- 
nection with  operations,  sucli  as  batter>'  loads, 
trunking  requirements,  spare  facilities,  peg 
counts,  and  similar  records  which  do  not  affect 
the  accounts  of  the  company. 
Records  of  telegraph,  cable,  and  wireless  messages 
handled: 
(a)  Monthly  or  periodical  reports  of  number  of 
mesi^ages  handled. 

(6)  Reports  of  unit  cost  of  handling  messages 

(c)  Message  delay  reports 

Inspection  records: 

Reports  and  records  of  condition  of  pay  station 
signs  and  Ixwths,  central  olhce  quarters,  build- 
ings, elevators,  meters,  machine!^',  etc.,  except 
as  provided  for  in  items  18  and  97. 
Detective  and  i>olice  service: 

Reports  and  records  in  connection  with  policing 
the  company's  property,  detective  service,  stolen 
property,  investigations  of  robberies,  and  at- 
tempts to  defraud  the  company. 

101.  Miscellaneous  records  of  telephone  exchanges  and 

branch  offices: 
All  records  at  telei)hone  exchanges  and  branch  offi- 
ces not  elsewhere  provided  for  herein. 

102.  Miscellaneous  rt  cords  of  local  telegraph  and  cable 

offices: 
All  records  at  local  telegraph  and  cable  offices  not 
elsewhere  i)rovided  for  herein. 

103.  Miscellaneous  records  of  wireless  stations: 

All  records  of  wireless  stations  (ship  and  coast  >  not 
elsewhere  provided  for  herein. 

ST.VTISTICS. 

110.  ReiK)rta  to   Interstate  Commerce  Commission  and 
other  governmental  authorities: 

(a)  Annual   financial,   operating,    and   statistical 

reports,  file  copies  of,  and  supporting  papers. 

(b)  Monthly  reports  of  operating  revenues  and 

expenses,  file  copies  of,  ana  supporting  pa- 
pers. 

(c)  Monthly  or  periodical  reports  regarding  acci- 

dents, file  copies  of,  and  supporting  papers. 

(d)  Monthly  or  periodical  reports  regarding  em- 

ployt'cs  and  salaries,  file  copies  of,  and  sup- 
porting papers. 

(e)  Reports  regarding  expenditures  of  proceeds 

from  sale  of  authorized  securities,  file  copies 
of,  and  supporting  papers. 

(J)  Other  reports,  file  copies  of,  and  supporting 
papers. 

{(j)  Reports  of  proix?rty  units  added  and  retired, 
completion  of  property  changes  and  state- 
ments of  charges  and  credits  to  the  invest- 
ment account,  file  copies  of,  and  supporting 
papei-s. 


Optional. 
Optional. 
1  year. 


Optional. 


6  yeare. 

3  years. 
1  vear. 

Optional. 


Optional. 


G  years. 

(>  years. 
a  veare. 


Permanently. 

1  year  after  current  year. 

3  years. 
3  years. 

Permanently. 

6  years. 
Permanently. 


) 


DESTRUCTION   OF  KECORDS. 


27 


Description  of  accounts,  etc. 


<. 


f 


STATISTICS — continued. 

111.  Reports  to  stockholders: 

(a)  Annual  reports  or  statements  to  stockholders, 
file  copies  of,  and  supporting  papers. 

(6)  Written  requests  for  conies  of,  and  acknowl- 
edgments of  receipt  of,  reports  to  stockhold- 
ers. 

112.  Monthly,  annual,  or  other  periodical  financial  reports 

or  statements,  comparative  or  otherwise,  and  sup- 
porting papers. 

Note.— Tiie  dupportin^  papers  referred  to  in  items  110,  111,  and 
112,  are  the  scpnrato  detailed  reports  and  .statements,  notelsx- 
whoro  pro-  ided  for  hortin,  which  arc  essential  toaveriBcati(m 
and  analy.-is  of  the  reports,  etc.,  referred  to  in  those  items. 

113.  Working   papers    (i.  e.,    preliminary  drafts",  memo- 

randa, etc.)  pro|yared  in  connection  with  the  com- 
pilation of  reports  and  statement-s  covered  by  items 
ilO,  111,  and  112,  but  which  are  not  necessary  to 
directly  support  such  reports  and  statements.  (Pee 
note  following  item  112.) 

114.  Miscellaneous    statistical    reports,    statements,   and 

summaries  (not  other>n'ise  provided  for  herein) 
used  by  officials  and  department  heads  for  ad- 
minLstrative  purposes  only  and  not  entering  the 
accounts  of  the  ccmipany. 

115.  Tabulating  cards: 

Tabulating  rards  used  in  the  compilation  of  statis- 
tics and  other  data  when  the  results  are  trans- 
scribed  to  other  records  covered  by  these  regula- 
tions. 

MISCELLANEOUS. 

120.  Telephone  directories: 

(a)  File  copiea  of  telephone  directories  of  the  com- 

pany's issue,  in  the  general  file  of  the  com- 
pany. .^ 

(b)  Surplus^  and   other   copies   of   telephone   di- 

rectories, if  copies  of  the  same  issues  are 
preserved  in  the  general  file  referred  to  in 
Item  (a)  above. 

(c)  Summaries,   data,   and   miscellaneous  records 

incident  to  the  preparation  and  issuance  of 
directories. 

121.  Instructions  to  employees  and  others: 

(a)  Rooks  and  circulars  of  instruction  to  employees 
and  others,  in  the  general  file  of  the  depart- 
ment in  which  tlie  complete  official  file  is 
maintained,  except  as  provided  for  in  item 
124. 

(6)  Circulars  and  notices  of  instructions  to  em- 
ployees on  matters  of  discipline,  deportment, 
anci  similar  subjects. 

122.  Records  of  auxiliary  and  other  operations: 

Records  summarizing  the  results  of  operations  other 
than  telephone,  telegraph,  cable,  and  wire- 
less operations. 

Note.— Led,:iers,  joumils,  abstracts,  reports,  vouchers,  etc., 
shall  bo  retained  for  the  same  periods  as  are  provided  for 
■imilar  documents  elsewhere  in  these  regulations. 


Period  to  be  retained. 


Perpianently. 
Optional. 

6  years. 


Optional. 


Optional. 


1  year. 


3  years. 
Optional. 

Optional 


6  yeaiti  after  expiration 
or  i^ancellation. 


Optional. 


6  years. 


28 


DESTRUCTION   OF   RECOKDS. 


Descrip'ion  oi  accounts,  etc. 


MiscEii,AXE0us— continued. 

123.  Benefit,  hospital,  and  insurance  departments: 

Records  of  employees'  ])enefit,  hospital,  and  in- 
surance dei)artments,  other  than  records  support- 
ing the  receipt  and  disbursement  of  funds  and 
records  provided  for  in  item  68. 

Note.— The  re«jrds  supporlinT  the  receipt  and  dlsbursoment 
of  funds  shall  be  retained  for  the  same  i)eriods  as  are  pro- 
vided for  similar  records  elsewhere  in  these  regulat  ions. 

124.  Data  on  destruction  of  records: 

(a)  Written  authorities,  cancellation  of  authorities, 
certificates  of  destruction;  reports  of  (lestruc- 
tion,  records  of  appointment  of  executive 
ofl5cers  and  committees  having  supervision  of 
the  destruction  of  records,  bulletins,  circulars, 
instructions  and  lists  or  schedules  of  forms 
and  records  pertaining  to  the  destruction  of 
the  carrier's  records,  in  the  general  file  of  the 
department  in  which  the  complete  official 
file  is  maintained. 

(6)  Records  and  memoranda  relating  to  the  prepa- 
ration and  issuance  of  bulletins,  circulars, 
etc.,  covered  by  item  (a)  above;  also  minor 
records  and  memoranda  pertaining  to  tho 
compliance  with  the  requirements  of  such 
bulletins  and  circulars. 

125.  Records  of  employees: 

(a)  Employees'  service  records  and  rosters,  showins? 
positions  filled,  attendance,  length  of  servico, 
and  other  relative  data. 

(6)  Applications  for  employment,  s<'hedules  oi 
working  hours,  efficiency  records,  photf>- 
graphs  and  other  identification  records,  and 
all  other  miscellaneous  records  pertaining  to 
employees. 

126.  Other  mis<:ellaneous  records: 

(a)  Records,  reports,  and  statements  pertaining  to 
construction  or  maintenance  work  performed 
by  the  carrier  for  others. 

(6)  Records  and  reports  pertaining  to  motor  and 
other  vehicles  and  their  equipment,  such  as 
tires,  oil,  gasoline,  and  batteries,  when  such 
records  and  Reports  are  not  used  in  determin- 
ing charges  or  credits  to  the  accounts  of  the 
company. 

(c)  Receipts  for  records  and  papers  temporarily 

removed  from  file,  when  records  and  papers 
have  been  returned. 

(d)  Receipts  and  records  pertaining  to  delivery  of 

articles  to  employ  exi,  such  as  badges,  keys, 
and  material  receipt  books. 


Period  tt  be  retained. 


1  year? 


DESTRUCTION   OF   RECORDS. 


29 


Description  of  accounts,  etc. 


Permanently. 


Vil 


Optional. 


1  year. 
Optional, 


For  the  periods  pro- 
s<'ribed  for  similar 
records  pertaining  to 
oi)erating  exj)en8C3. 

Optional. 


127. 


128. 


Optional. 
Optional. 


} 


f 


MISCELLANEOUS— continued. 

126.  Other  miscellaneous  records — Continued. 

(«)  Receipts  for  registered  mail,  express  packages, 
etc. 

(/)  Passes  to  buildings  or  property  of  the  company, 
surrendered  upon  or  after  use. 

(a)  Records  of  building  space  occupied 

(h)  Lunch  tickets  redeemed,  after  summary  into 
accounting  classification. 

(t)  Records  of  lunch  tickets  on  hand  and  receipts 
for  tickets  issued. 

(j)  Unissued  lunch  tickets 

(k)  Records  of  mileage  and  other  transportation 
used. 

(I)  Adding  machine  lists  and  memoranda  of  com- 
l)ilations  by  mechanical  devices  if  not  used 
as  summaries  to  support  entries  to  the  ac- 
counts. 

(m)  Organization  diagrams,  charts,  records,  and 
mailing  lists. 


(n)  Records  of  forms  used  by  the  company. 


Records  and  report?  of  tire  drills, 
(p)  Records  of  postage  stamps  received  in  pa>iiient 
of  subscribers'  bills  and  records  of  stamps  pur- 
chased, when  not  necessary  to  support 
vouchers. 
(q)  Transmittal  lists  or  forms  used  for  indicating 
papers  and  records  forwarded  from  one  de- 
partment to  another,  provided  such  lists  or 
forms  do  not  contain  data  affecting  the  ac- 
counts of  the  company. 
Duplicate  accounts,  records,  and  memoranda: 

JJuplicatc  copies  of  accounts,  records,  and  memo- 
randa listed  in  these  regulations,  if  all  informa- 
tion on  such  duplicates  is  contained  on  the 
originals  or  other  copies  retained,  and  if  such 
duplicates  are  not  specifically  provided  for 
in  these  regulations.  (See  par.  19,  p.  12.) 
Correspondence : 

(a)  Correspondence  and  records  thereof  relating  to 
subjects  listed  in  items  1  to  127,  inclusive. 

(6)  Stenographers'  notebook  and  phonograph  and 
other  mechanical  device  records. 

(c)  Extra  copies  of  letters,  etc.,  used  for  tracing  or 
following  up  correspondence,  or  for  other  pur- 
poses, if  original  or  other  copies  are  retained 
as  provided  for  in  item  (a)  above. 

(<f)  Operators'  copies  of  telegrams,  including  relay 
copies,  if  the  original  or  other  copies  of  such 
messages  are  retained,  as  provided  for  in  (a) 
above. 


Period  to  be  retained. 


Optional. 

Optional. 

Optional. 
Optional. 

Optional. 

Optional. 
Oi>tional. 

Optional. 


Optional. 

Optional. 
Optional. 
Optional. 


Optional. 


Optional. 


For  the  period  pre- 
scribed for  the  item 
to  which  it  relates. 

Optional. 

Optional. 


Optional 


APPENDIX. 


0^ 


'v 


The  following  forms  are  suggested  for  the  use  of  telephone,  tele- 
graph, and  cable  companies  (including  wireless  companies) ,  but  any 
other  forms  may  be  used,  provided  they  show  the  information  re- 
quired by  the  regulations. 

(A)  Form  of  resolution  of  Board  of  Directors  designating  an  of5.cer  to  have  general 
supervision  over  the  destruction  of  accounts,  records,  and  memoranda.  (See  par.  2,  a, 
of  the  regulations.) 

Excerpt  from  minutes  of  the  meeting  of  the  Board  of  Directors  of 

Company,  held  at  its  office  in on 

,  19...: 

''Resolved,  That 

(Title  of  officer  or  name  and  title.) 

be,  and  he  is  hereby,  desij^nated  as  the  executive  officer  of  this  company  to  have 
general  supervision  over  the  destruction  of  accounts,  records,  and  memoranda  in 
accordance  with  the  Regulations  to  Govern  the  Destruction  of  Records  of  Telephone, 
Telegraph,  and  (able  Companies  (including  wireless  companies),  effective  on  January 
1,  1920,  issued  by  the  Interstate  Commerce  Commission." 
I  hereby  certify  that  the  above  is  a  true  and  correct  copy. 


(Name.) 


^ 


f 


,19. 


(Title.) 


31 


32 


APPENDIX. 


(B)  Form  of  resolution  of  Board  of  Directors  designating  an  officer  to  have  super- 
vision over  th5  destraetion  of  certain  accounts,  records,  and  m*moranda.  (See  par. 
2,  b,  of  the  regulations.) 

Excerpt  from  minutes  of  the  meeting  of  the  Board  of  Directors  of  the 

Company,  held  at  its  office  in on 19. . .: 

''Resolved,  That « 

(Title  of  officer  or  nam©  and  title.) 
be,  and  he  hereby  is,  designated  as  the  officer  having  supervision  over  the  destruction 
of  the  accounts,  records,  and  memoranda  named  below,  the  destruction  of  which  is 
permitted  by  the  Regulations  to  Govern  the  Destruction  of  Records  of  Telephone, 
Telegraph,  and  Cable  Companies  (including  wireless  companies),  effective  on  Janu- 
ary 1,  1920,  issued  by  the  Interstate  Commerce  Commk*«ion." 

Form  No.  Description. 


Period. 


Item  No.  In  I.  C.  C. 
Uegulations. 


I  hereby  certify  that  the  above  is  a  true  and  correct  copy 


(Name.) 


,19. 


(Title.  J 


(C)  Form  of  resolntion  of  Board  of  Directors  naming  a  cremation  committee  for 
the  destruction  of  canceled  bonds,  interest  coupons,  etc.  (See  par.  ti  of  the  regula- 
tions.) 

Excerpt  from  lninute^  of  the  meeting  of  the  Hoard  of  1  >ircctors  of  the 

Company,  held  at  it.*»  office  in  


on ,19..: 

"Resolved,  Tliat  i)ursuaut  to  the  Regulatious  to  Govern  the  Destruction  of  Records 
of  Telephone.  Telegraph,  and  Cable  Companies,  (includih-  wiroloss  <-ompanies), 
effective  on  January  1.  I92i),  i.s«ued  by  the  Interstate  Commertre  Cornmia.sion,  the 


board  designates. 


(Titles  of  sucti  persons,  or  names  and  title.s.) 
to  be  a  cremation  < oinmittee  to  act  in  conjunct ioti  with  the  representatives  of  the 

trustees  in  the  destruction  of »» 

(Li.st  of  and  description  ofdocuments  to  be  destroyed.) 
1  hereby  certify  that  the  aliove  is  a  true  and  correct  copy. 


(Name.) 


.  ^     1^ .  • «  « 


(Title.) 


i» 


<v 


^ 


f 


V 


APPENDIX. 


33 


(D)  Form  of  written  authority  for  the  destruction  of  certain  accounts,  records,  and 
memoranda.    (See  par.  8,  a,  of  the  regulations.) 

The Company, 

Office  of 


'  ,     1(7.  •• 


In  conformity  with  the  authority  conferred  upon  me  by  the  Board  of  Directors,  1 

hereby  authorize  and  direct 

(Name  and  title  or  occupation.) 
to  destroy  the  accounts,  records,  and  memoranda  of 


this  company  listed  below: 
Form  N».  Description. 


Period. 


Item  No.  in  I.  C.  CJ. 

Regulations. 


(Name.) 

(Title.) 


(E)  Fonn  of  written  authority  of  continuing  effect  for  the  destruction  of  accounts, 
records,  and  memoranda.    (See  par.  8,  b,  of  the  regulations.) 

The Company, 


Office  of 


,19... 


In  conformity  with  the  authority  conferred  upon  m«  by  the  Board  of  Directors   I 

hereby  authorize  and  direct 

(Name  and  title  or  occupation.) 
to  destroy  from  time  to  time  the  accounts,  records,  and  memoranda  of  this  company 
in  hia  custody,  the  destruction  of  which  is  permitted  by  the  Regulations  to  Govern 
the  Destruction  of  Records  of  Telephone,  Telegraph,  and  Cable  Companies  (includ- 
ing wireksB  companies),  effective  on  January  1,  1920,  issued  by  the  Interstate  Com- 
merce Commission. 


(Name.) 


(Title.) 


32 


APPENDIX. 


(B)  Form  of  resolution  of  Board  of  Directors  designating  an  officer  to  have  super- 
vision over  the  destraetion  of  certain  accounts,  records,  and  memoranda.  (See  par. 
2,  b,  of  the  regulations.) 

Excerpt  from  minutes  of  the  meeting  of  the  Board  of  Dirertors  of  the 

Company,  held  at  its  office  in on 19. . . : 

"Resolved,  That * 

(Title  of  officer  or  name  and  title.) 
be,  and  he  hereby  is,  designated  as  the  officer  having  supervision  over  the  destruction 
of  the  accounts,  records,  and  memoranda  named  below,  the  destruction  of  which  is 
permitted  by  the  Regulations  to  Govern  the  Destruction  of  Records  of  Telephone, 
Telegraph,  and  Cable  Companies  (including  Avireless  companies),  effective  on  Janu- 
ary 1,  1920,  issued  by  the  Interstate  Commerce  CommlMsion.*' 


Form  No. 


Description. 


Period. 


Item  No.  In  I.  C.  C. 

Kegulutions. 


I  hereby  certify  that  the  above  is  a  true  and  correct  copy 


(Name.) 


.19. 


(TlfK>.» 


(C)  Form  of  resolution  of  Board  of  Directors  naming  a  cremation  committee  for 
the  destmcUon  of  canceled  bonds,  interest  coupons,  etc.  (See  par.  6  of  the  regula- 
tions.") 

Excerpt  from  miuulr.-  of  the  inootiu^'  of  (ho  IJoartl  of  I  >irv(tors  of  the 

Company,  held  at  it.s  office  in  


on ,19..: 

''Resolved,  That  i)ursuaut  to  the  Hegulatioii.s  to  (iovern  the  Destruction  of  Records 
of  Telephone,  Telegraph,  and  Cable  Companies,  (includih:,'  wireless  companies), 
effective  on  January  I,  1920,  i.ssued  by  the  Interstate  Commerce  Comini.Hsion,  the 


board  designates. 


(Titles  of  such  persons,  or  names  and  tltle.«!.) 
to  be  a  cremation  <  ununittee  to  act  in  conjunction  with  the  representatives  of  the 

trustees  in  the  destruction  of »» 

•••.•••-.. ....,,4 

(LI.-<t  of  and  desciiption  ofdociiments  to  lie  destroyed.) 
1  hereby  certify  that  the  above  is  a  true  and  correct  copy. 


,  19-... 


(Name.) 

(Title.) 


^ 


<v 


f 


\ 


APPENDIX. 


33 


(D)  Form  of  written  authority  for  the  destruction  of  certain  accounts,  records,  and 
memoranda.    (See  par.  8,  a,  of  the  regulations.) 

The Company, 

Office  of 


.,  19... 


In  conformity  with  the  authority  conferred  upon  me  by  the  Board  of  Directors,  1 

hereby  authorize  and  direct 

(Name  and  title  or  occupation.) 
to  destroy  the  accounts,  record.«,  and  memoranda  of 


this  company  listed  below: 
Form  No.  t>escriptIon. 


Period. 


Item  No.  in  I.  C.  a 
Regulations. 


(Name.) 

(Title.) 


(E)  Form  of  written  authority  of  continuing  efTect  for  the  destruction  of  accounts, 
records,  and  memoranda.    (See  par.  8,  b,  of  the  regulations.) 

The Company, 


Office  of 


,19... 


In  conformity  with  the  authority  conferred  upon  me  by  the  Board  of  Directors,  I 

hereby  authorize  and  direct 

(Name  and  title  or  occi^iation.) 
to  destroy  from  time  to  time  the  accounts,  records,  and  memoranda  of  this  company 
in  hm  custody,  the  destruction  of  which  is  permitted  by  the  Regulations  to  Govern 
the  Destruction  of  Records  of  Telephone,  Telegraph,  and  Cable  Companies  (includ- 
ing wireiew  companies),  effective  on  January  1,  1920,  issued  by  the  Interstate  Com- 
merce Commission. 


(Name.) 


(Title.) 


34 


APPENDIX. 


(F)  Form  of  certificate  of  destruction.     (See  par.  11,  a,  of  the  regulations.) 

The Company, 

OfHceof ; 

,  19. 


Dear  Sir:  I  hereby  certify  that  I  have  this  day  dostroyed  the  accounts,  records, 

and  memoranda  listed  below,  pursuant  to  your  authority  dated ,  19 

I  further  certify  that  no  accounts,  records,  or  memoranda  other  than  those  named  have 
been  destroyed  therewith. 


io 


Form  No. 


Description. 


rcriod. 


Item  No.  in  I.  C.  C. 
Regulations. 


Yours  truly, 


(Name.) 


(Title  or  occupation.) 

(G)  Form  of  cumulative  certificate  of  destruction.    (See  par.  11,  b,  of  the  regu- 
lations.) 

ITie Com])any, 

Office  of , 

' I  1J...« 


Dear  Sir:  I  hereby  certify  that  I  have  destroyed  the  accounts,  records,  and  mem- 
oranda listed  below,  pursuant  to  your  authority  dated  ,  19 J 

further  certify  that  no  accounts,  records,  or  memoranda  other  than  those  named 
have  been  destroyed  therewith. 


";    I  v< 


Form  No. 


Description. 


Period. 


Item  No.  in  I.  C.  C. 

Itogiilatifflis. 


Date  of 
Destruction. 


Youi-s  truly, 


(Name.) 
(Title  or  occtipation.) 


INDEX  TO  RECORDS. 


Abandonod  project*,  226. 

Accidents,  6S,  110c. 

Accomitants,  traveling,  reports,  23. 

Accoimts;  general,  1,  3,  4,  9;   local  office,  U,  /,  4e, 
42,  92<:  ship,  92f. 

Accruals  memoranda,  9c. 

Adding  machine  records,  1261. 

Addresses  of  subscribers,  81. 

Adjustments;  with  agents,  43,  49;  oX  patrons'  ac- 
counts, 44,  49;  of  inventories,  73a. 

Advertising;  patrons'  contracts,  £0e:  tor  promoting 
business,  96a,  c;  solicitation,  966. 

Afandes;  ledgers,  U,  /;  cash  books,  4e;  audits  of,  23 
funds  30  J,  /,  33, 42;  remittances,  32c,  42;  revenues, 
405,  41a.  46!>,  91;  adjustments,  43;  »ettlcments,  45; 
disbursements,  465,91;  allowances,  49;  charge  ad- 
vices, :0;  tariff  files,  866;  miscellaneous,  101,  IflfiJ, 
103. 

Agreements.    (Set  Contracts.) 

Allotment  requests,  Se,  Qd. 

AllowaxMXs  for  irregularities,  49. 

Applications.    (See  Requests.) 

Appointment  tickets,  856. 

Assignments  of  pay,  65. 

Attachments  of  pay,  65. 

Auditors;  general  auditors'  cash  books,  4a;  travel- 
ing auditors'  reports,  23a;  miscellaneous  audits, 
236;  division  auditor'  reports,  24. 

Authorities;  for  security  Issues,  7;  for  accounts  re- 
ceivable bills,  10c;  for  expenditures,  21,  666;  for 
deposit  transfers,  306;  lor  writinf  off  accoimts, 
48;  for  service  rates,  50,  86;  for  specific  voudiers, 
60d;  for  pay  roll  changes,  636;  far  material  sales, 
71c;  for  material  recoived,  72i;  for  record  de- 
struction, 124a. 

Automobiles.    (See  Vehicles.) 

Auxiliary  operations,  122. 

Badges  for  employees,  12M. 

Balance  sheets;  of  geiieral  olBces,  16,  c,  /;  of  local 
offlces.  If,  91a,  6,  c;  of  storekeepers,  706, 

Bank  deposits,  30,  31,  42. 

Benefit  department,  123. 

Bids  and  offers  on  materials,  71/. 

Bills;  bills  oi  sale,  5d, .  6c;  interdepartmental,  9a; 
bills  collectible,  10,  41a,  6;  bUls  pa>-ablc,  «(y;  bUls 
of  lading,  71c. 

Bonds;  mortgage  bonds,  6,  7, 16;  fidelity  bonds,  17. 

Branch  offices;  collections,  41a;  tariff  flics,  b66;  mis- 
cellaneous. 101. 

Buildings;  inspection,  99;  passes,  12V;  spaee  oeco- 
pied,  126^. 

Cable  service;  local  ofRco  accounts,  Ic,  4c.  91;  mes- 
sage records,  83,  90, 95,  98;  miseellaueous,  102. 
Call  boxes,  93. 
Canvassing  for  business,  96. 
Capital  stock,  5,  7, 16. 


Carbon  copies  of  messages,  83,  84. 

Cash  accounts,  4,  30c,  34,  35,  92/. 

Cashiers'  balances  in  field,  34. 

Oertificatcs;  stock,  56,  /,  16;  receivers',  16;  tempo, 
rary,  16;  of  wages,  63c;  of  record  destruction,  124a. 

Charge  advices,  50, 66a. 

Checking;  of  employees' time,  20c,  62;  of  messages, 
47,  So/;  of  materials,  71o. 

Checks;  issued,  31rf,  g;  stopped,  31^;  outstanding, 
326;  paid,  606,  63c;  receipts  tor,  63^. 

Circuit  service,  07a. 

Claims;  for  hisurance,  18a;  against  carrier,  67. 

Coast  station  records,  84,  92, 103. 

Codes,  12. 

Coin  boxes,  41c. 

Collect  ions,  41, 

Commercial  news  service,  83a,  6, 94. 

Company  messages,  S3d,  846,  856. 

Complaints  of  service,  97^?. 

Completion  reports,  21a,  UOg. 

Concurrences  in  rates,  fOd. 

Construction;  contracts,  20c;  authorities,  21a;  esti- 
mates, 213,  6,  c,  e;  expenditures,  21rf;  work  rec- 
ord, 21/'  work  for  others,  126a. 

Contracts;  unspecified,  Ua,  c,  d;  with  employees, 
146,  d;  for  insurance,  186.-  on  property,  20c-  Ux 
service,  50,  80;  on  materials,  71^. 

Correction  of  telephone  tickets,  85c. 

Correspondence;  on  fire  damages,  18c;  on  bank 
checks,  Zlg;  on  employees'  pay,  656;  on  rates,  8^; 
in  general,  128a,  c. 

Coupons;  bond  interest,  6c,/,  16;  reduced  rates,  87. 

Credit  of  ratroEs,  41/. 

Customers;  ledgers,  Ic ,  /;  credit,  41/,  g;  adjustments, 
44;  service  contracts,  80. 

Damages,  from  f^re,  18c,/,  g;  in  operations,  67,  68. 

Deeds  of  title,  13. 

Delays  in  service,  97c,  98c. 

Delivery;  of  materials,  71  j;  of  messages,  906,  c. 

Department  records;  bills,  9a;  autborired  expenses, 
66a,  material  records,  706,  72c  rate  files,  866;  star 
tistics,  114. 

Deposits  in  banks,  30,  31,  42. 

Depreciation  of  f  roperty,  206. 

Destruction  of  records,  124. 

Detective  service,  100. 

Diagrams,  ¥0d,  I26m. 

Directories;  advertising,  80c,  966;  files  and  stock, 
1203,  6;  compilation  data,  120c. 

Directors'  minutes,  11. 

Disbursements;  for  construction,  20rf,  c,  21;  distri- 
bution, 20d,  61,  64;  of  material,  20r,  646,  Tlk;  by 
depositaries,  31o;  by  treasurer,  32;  adjtistments, 
43;  vouchers,  60;  pay  rolls,  63;  specially  authorized, 
66;  by  local  oliices,  91d;  lor  employees'  benefit, 
123tjo<c. 

DiscliarfcC  tickets,  63c. 

35 


36 


INDEX  TO  RECORDS. 


INDEX  TO  RECORDS. 


DLstrif  t  authorized  expenses,  6f»i. 
Division  sheets  for  rates,  t6j,  b,  I. 
Divisional  records;  auditors'  reports,  2t;  authorized 

expenses,  661.  material  transffrs,  Tic. 
Drafts;  outstanding,  326.  paid,  GOi. 
Duplicate  records,  127. 

Efficiency;  of  service,  97;  of  employees,  1255. 
Election  returns,  91. 
Elevator  inspection,  99. 
Emergency  calls,  856. 

Employees;  securities  contracts,  146,  d;  fkielity 
bonds,  17;  work  reports,  20e,  62,  646;  meals  fur- 
nished, 41d.  pay  distraint,  C5;  messages,  83*; 
Instructions,  121;  provident  fimds,  123;  service 
records,  125;  badges,  keys,  receipt  books,  126d. 
Engineering,  22. 

Errors;  on  bills,  44;  in  messages,  47,  8^. 
Estimates;  for  expenditures,  21;  for  engineering,  22; 

for  working  funds,  30«;  for  materials,  72A. 
Exchanges;  cash  books,  4c;  tariff  files,  866;  miscel- 
laneous, 101. 
Executive  committee  minutes,  11. 
Expenditures,  60-68, 110*. 
Express  package  receipts,  126*. 
Fidelity  bonds,  17. 

Field  work;  cashiers'  funds,  34;  supplies,  72*. 
Financial  records,  1-24. 
Fire  protect  Imi;  insurance  and  losses,  18;  fire  drlll5, 

1260. 
Fixed  capital,  20. 
Forms  used,  126n. 
Franchise  papers,  13. 
Franks  for  messages,  87. 
Free  messages,  S3*,  87. 
Freight  bills,  71,'.. 
Funded  debt,  6,  7,  16. 
Fimds  airrent,  30-35. 

Garnishments  of  pay,  65. 
General  records,  1-24. 
Government  messages,  83j. 
Guide  cards,  85c, 


37 


Hospital  department,  123. 

Identification;  for  messages,  87/,  SS;  for  transporta- 
tion, 89f ;  of  employees,  1256. 

Indexes;  of  ledgers,  la;  of  bills,  lOrf;  of  vouchers, 
6O0,  * ;  of  claims,  67o. 

Injuries  to  persons,  67a,  68. 

Inspection;  for  Insurance,  ISd:  of  materials,  72^;  of 
.service,  976;  of  property,  99. 

Instnictions  for  employees,  121. 

Instruments,  80A,  82. 

Insurance;  of  property,  18;  tot  employees,  123. 

Interdepartmental  business,  9o,  12Gflr. 

Interest;  on  bonds,  6*,/,  10;  on  bank  balances,  Sic. 

Interruption  of  service,  49. 

Inventories;  of  property,  20j,/;  of  material.",  73. 

Invoices  of  materials,  716,  i. 

Job  ticket?,  62,  646. 

Journals;  general,  3,  9;  for  labor,  61;  for  materials, 
64o;  for  auxiliary  operations   122no<*. 

Keys  for  employees,  126(f. 

Labor  used.  2^e,  61,  62. 

Lawsuits  to  collect  employees'  [iny,  65. 


Leases,  14,  8ft\. 

Ledgers;  general,  la;  subscribers  and  pay  station, 

Id,  50;  local  office,  1*;  of  securities,  5a,  60;  of  checks, 

3l<f;  of  labor,  61;  of  materials,  64a,  70;  for  auxiliary 

operations,  l22noie. 
Letters.    (See  Correspondence.) 
IJabiilty  insurance,  186. 
Line  orders,  50. 
Local  offices;  ledgers,  1*,  /•  cash  books,  4c;  business, 

42,  466,  91;  miscellaneous,  102. 
Loose  sheet  cash  accounts,  4no/?. 
Lost  calls,  8.56,  97c. 
Lunches,  4  Id,  126ft,  1J, 

Mail  registry  receipts,  128*. 

Managers;  funds,  30d,  33;  deposits,  30f.  remittances, 

32c;  revenues,  406;  adjustments.  43;  settlements, 

45;  rate  authorities,  80c. 
Maps  for  engineering,  22. 
Market  report  service,  80r,  Wa. 
Masters'  service  messages,  8  If. 
Materials;  appUed,  20*,  64;  ledgers,  70;  piwchases 

and  sales,  71;  receipts  and  Issues,  72;  inventortes. 

73.  * 

Meals  for  employees,  41d,  126A,  i,j. 

Measured  service,  85d,  *. 

Messages;  en  fire  lcs5, 18*;  revenue,  4(V;  checks  and 
errors,  47,  S5f:  originals  nnd  copies,  83,  8^1,  I28d; 
mes-'ago  tape,  av;  telephrnc  1  ickets,  85;  free  and 
reduced  rate,  87,  92c,  d;  receipts  and  deliveries, 
80;  guaranteed  and  uncollected,  01/;  refunded, 
91^7;  wirelcs?  service,  92;  statistic;',  98. 

Messenger  service,  856,  93. 

Meter  inspection,  99. 

Mileage  for  traasportaticn,  12f.JL. 

Minors'  salary  releases,  C5c. 

Minutes  of  corporate  meetings,  11. 

Money-transfer  service,  126,  83a,  6,  P5. 

Municipal  permits,  15d. 

News  service,  83a,  6.  94. 
Notes  retired,  16. 

Official  calls,  856. 

Operatioiis  records,  80-103. 

Operators;  number  sheets,  iOd;  message  conies. 

128i. 
Orders;  for  materials,  71a;  for  franks,  87o. 
0rgani7ation  data,  126m. 
Overcharges,  44,  67a. 
Overstock  in  materials,  73d. 
Overtime  tickets,  62. 

Packing  slips  for  materials,  71*. 

Passes;  message  passes,  87;  on  transport  at  ion  lines, 

89;  to  buildings,  12^. 
Patrons.    (See  Subscribers.) 
Pay  of  employees;  pay  rolls,  CI,  62,  63;  assignments 

and  releases,  65;  attachments  and  garnishments, 

65. 
Pay  stations.  Id,  99. 
Peg  counts,  97c,  h. 
Performance  records,  97c. 
Permits  given  and  obtained,  15. 
Petitions  to  municipalities,  15d. 
Phonograph  dictation,  128/j. 
Photographs  of  employees,  1256. 
Plans  for  engineering.  22. 
Plant  and  oquipraent,  20. 


^'^ 


y 


<v 


P 


Pole  p!arem»nt  porrait«.  15i. 
Poliro  service.  100. 
Postage  stamps,  126p. 
Premiums  for  insurance,  18t. 
Prepaid  expense  memoranda,  9c. 
Press  messages,  FSa.  6. 
Price  records  cf  materials,  71d,  72*. 
Private-^  ire  contrir ts,  SOp. 
Profiles  f c  r  engineering,  22. 
Prorate  of  revenues,  86*. 
Pr<viies  of  security  holders,  83. 
Purchase  cf  matrrials,  71. 

Radi(  grams,  84. 

Rate  authorities,  83. 

Ratings  of  credit,  41/". 

Receipts;  for  working  funds,  30d;  for  cash  expended, 
6(XV  for  employees'  pav.  63*  for  pay  rolls  and 
pay  checks.  Cl^-  for  materials,  71;,  72d;  for  loased 
instruments,  80V  for  rate  authorities.  86c;  f:;r 
filed  papers.  126c-  for  employees'  supplies,  12fd; 
tor  mail  and  express  matter,  126ft  for  lunch 
tickets,  126j. 

Receivers' f^rtiflcntes  retired,  16. 

Reconcilement  of  bank  balances,  31i. 

Register  readings  for  measured  service,  85i,  *. 

Regulating  bodies;  authority  for  security  issues,  7; 
coocvuTcnoes  in  rates,  S<5i;  reports  by  carrier,  110. 

Relay  messages,  83/,  128i. 

Release  of  pay,  65^,  c 

Ronittances  of  cash,  32c,  4i. 

Repairs;  authorizations,  60i;  of  purchased  stores, 
71f ;  for  outsiders,  126j. 

Replacement  of  property,  20'j. 

Reports;  to  tax  bodies,  19;  to  regulating  bodies, 
21a,  110,  124;  to  stockholders.  111;  financial,  112. 

Requests;  for  securities  allotments,  6*,  6i;  for  use 
of  facilities,  15;  for  use  of  public  ways,  15i;  for 
pay-roll  changes,  63*),  c;  for  disbursement  authori- 
ties, «J6^;  for  telephone  service,  80a,  6,  g;  for  rate 
authorities,  S6c;  for  franks,  87c;  for  transportation 
pMses,  .S9i:  for  employment,  125V 

Requisitions;  for  working  funds,  30/;  for  materials 
71*,  72d,  h. 

Retirement;  of  securities,  16;  of  property,  20i. 

Revenues,  10,  24,  40-5J. 

Robbery  investigations,  103. 

Sales:  of  secur  .tics,  5d,  Cc;  o.*  property,  20c;  of  ma- 
terials, 71. 

Scrap  sales  authorities,  71c. 

Seals  of  coin  boxes,  41*. 

Securities;  owned,  :',  35;  issued,  5,  6,  7;  retired,  5f, 
9f,  16;  purchase  contrac  ts,  146. 

Service  messages,  fc3d,  846. 

Service  records  of  employees,  97. 

Settlements  with  other  carriers,  45,  46. 

Ship  wireless  service;  contracts,  SO/;  messages,  84, 
82;  accounts,  92/;  miscellaneous,  103. 

Shipment  of  materials,  71*,  k,  m. 

Shipowners'  messages,  84c. 

Solicitin;  of  advertise.Tients,  93 

Specifications  for  engineering,  22. 

Sporting  news  service,  91. 

Statistics  records,  110  115. 

Stenographers'  dictation  notes,  1286. 

Stock  cards  for  materials,  73i. 

Stock-market  service,  MV,  Mi,  ft,  mj. 


Stockholders;  meetings,  8,  11;  proxies,  8a;  reports 
to,  111. 

Stoppage  of  service,  43. 

Stores;  ledgers,  70;  purchases    and   sales,    71;  re- 
ceipts and  issues,  72;  inventories,  7^. 
Street-opening  permits,  15i. 
Stubs;  of  securities,  56,  66;  of  chocks,  31d;  of  bUls, 

416,  c:  of  messages,  83,^;  of  toll  statements,  85c. 
Studies;  for  engineering,  22;  for  promoting  busi- 
ness, 96,/;  of  traffic  conditions,  97A. 
Subscribers;  ledgers,  Id,  f;  credits,  41/,  g;  adjust- 
ments,   44;  allowances,    49;  ledger   sources,   &Q; 
service  contracts,  SO;  personal  data,  81;  instru^ 
ments,  82. 
Subscription  to  securities,  5r,  6d. 
Supplies.    (See  Materials.) 
Switchboard  operations,  97d,  *. 
Switching  tickets,  ^56. 

Tabulating  cards,  115. 
Tape  of  messages,  83^. 
TarifTs  of  rates,  S6. 
Tax  returns  and  appeals,  19. 
Telegrams.    (See  Messages.) 
Telegraph  offices.    (See  Local  offices.) 
Testing;  ol  materials,  72^;  of  telephone  service  856 
976,  c 

Tickets;  for  employees'  time,  20*,  62,  63*,-  lor  ma- 
terials applied  and  recovered,  20*,  646  72A;  lor 
message  service,  40c,  85;  for  bill  collections,  4 I6fc- 
for  job  record,  62,  646'  for  material  deliveries,  71j; 
for  messenger  service,  856;  for  lunch  service,  126a! 
•>  • 

Time  records  of  labor,  20*,  62,  63*. 

Time-service  contracts,  80c. 

Title  papers,  13 

Toll  service,  40c,  85,  86*. 

Tracing;  of  materials,  71o;  of  correspondence,  128c. 

Transfers;  of  securities,  5c,  d,  Cc;  of  funds,  31a;  of 
service,  50;  of  materials,  72c. 

Transportation  companies;  settlements    46;  mes- 
sa:jes,  S3c;  passes,  89. 

Travelin;;  accountants'  reports,  23. 

Treasurer's  records,  4a,  30-35. 

Treasury  securities,  2,  35. 

Trial  balance  sheets,  U,i. 

Trouble  records,  976. 

Uncollectible  revenue,  48,  91/. 
Undercharges,  44. 
Unit  costs,  221,986. 
Unsettled  accounts,  10*. 

Vehicles;  iusurance,  186;  miscellaneous,  1266. 

Voting  list  of  security  holders,  S. 

Vouchers;  outstan  Un?,  326,  d,  uy:   audited,  60a; 

paid,  COc;  authorities,  COd;  memoranda,  60*;  of 

auxiliary  operations,  122  noe. 

Wages.    (See  Pay  of  employees.) 

Watchmen's  reports,  18y. 

Wireless  service;  local  office  accounts,  1*,  4c;  con- 
tracts, SO/;  messages,  18*,  84,93  message  records^ 
95,  9S;  station  records,  92, 103 

Witnesses' statements,  686. 

Work  orders,  20*,  21  ,  G2,  046. 

Workin:^  funds,  30c,  c,  33,  34. 

Workmen's  rejwrts,  20*,  (2, 64>. 


O 


} 


Date  Due 

fthfT  ft « 

k*« 

►w 

JIIL  8  7  196( 

5 

lar— 

106  a « 

vtinir 

\ 

«U6 

SPP  7 

iqfi«; 

I 

I 

^ 

9 

NEH 


COLUMBIA  UNIVERSITY  L  BRARIES 


004140861 


k 


APR  t  5 1994 


WAY  2  3  1930 


:;^!rrs; 


Hfiiirii 


■^5' 


"^c. 


END  OF 
TITLE 


